topic Childcare Tax Credit Question in Deductions & credits

Childcare Tax Credit Question

S1993 — Tue, 10 Mar 2026 07:18:10 GMT

Hello,

I am using the refund and return calculator and have a question. For the first time ever, I had the max $5,000 deducted from my paychecks to use on dependent care this year. We ended up spending a total of around $15,000 total in daycare this year, which I'm entering into the total child care expenses column. My question is involving the "how much child-care reimbursement was received in 2022" question. Is that referring to the dependent care program, to which I would then enter the $5,000 figure, or is that in relation to something else (such as a daycare stipend from your employer?). The reason I ask is because putting in the $5,000 increases the amount of taxes I owe by $1,000.

Thanks!

Re: Childcare Tax Credit Question

Critter-3 — Tue, 20 Dec 2022 20:53:58 GMT

In the TT program that $5000 you paid into the FSA will be reported on the W-2 box 10 ... did you enter that correctly ? If you did not then you were suprised when you got to the Day Care section and entered that $5K amount which would have reduced the credit the same what as if you put the amount on the W-2 earlier. The program reduced the credit by the amount you could not count ... the credit was only calculated on the $1000 above the $5000 already set aside tax free.

Re: Childcare Tax Credit Question

S1993 — Tue, 20 Dec 2022 20:56:20 GMT

In the calculator, it only asks for taxable income. I did not include the $5,000 in that section since it's pre-tax.

Re: Childcare Tax Credit Question

NCperson — Tue, 20 Dec 2022 21:15:56 GMT

@S1993 - note there is a bug in the Taxcaster calculator related to the child tax credit - at some income levels it won't matter, but might be better to use this one instead:

https://www.dinkytown.net/java/1040-tax-calculator.html

Re: Childcare Tax Credit Question

Critter-3 — Wed, 21 Dec 2022 16:56:55 GMT

OK ... so you are using a calculator/estimator and not the acutal program. The estimator works the same way just with a different path ... when you entered the $15K expense the program gave you a credit based on the $6K max allowed then when you entered the $5K the credit was naturally reduced which reduced the refund. This is normal. You got the tax reduction when you put the money into the FSA ... you saved fed/SS/medicare taxes on that $5K which is better then simply a % credit on the tax return.