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What to do with dependent care fsa money if i am not eligible to use it due to non-working, non-full-time-student?

hi, i put in $2000 in dependent care FSA, and found that i am able to use it, because my wife does not work and only part-time in school. 

what shall i do with the $2000? 

what would happen to the $2000? would i add it to my w2? would i pay tax on it even though i can't use it?

(we file tax married jointly)

thanks!!

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1 Best answer

Accepted Solutions
Hal_Al
Level 15

What to do with dependent care fsa money if i am not eligible to use it due to non-working, non-full-time-student?

You will pay tax on it since it did not qualify as tax exempt. TurboTax (TT) handles this somewhat automatically.

The $2000 dependent care benefit is in box 10 of your W-2. When TT sees that it will send you to the dependent care interview. When you fail to qualify, TT will complete form 2441 to calculate the taxable portion (all, in your case) and add the $2000 to line 7 of form 1040, with the notation DCB

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1 Reply
Hal_Al
Level 15

What to do with dependent care fsa money if i am not eligible to use it due to non-working, non-full-time-student?

You will pay tax on it since it did not qualify as tax exempt. TurboTax (TT) handles this somewhat automatically.

The $2000 dependent care benefit is in box 10 of your W-2. When TT sees that it will send you to the dependent care interview. When you fail to qualify, TT will complete form 2441 to calculate the taxable portion (all, in your case) and add the $2000 to line 7 of form 1040, with the notation DCB

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