Child Care Credit is zero, but refunds increased

[pbix]

I entered the amount my wife and I spent on child care in 2020 (so that we could work) into TT and TT reported that we had a Child and Dependent Care Credit of zero.  However, the amount of our federal refund increased by about $1300 from where it was before I entered the information, and our state refund increased by about $350.  Of course I am pleased by this good news, but can this be correct?  Why are our refunds increasing when our credit is zero?

If it matters, I think the reason that our credit is zero is that we have only one child, so that our maximum qualified expenses are $3000, and I created a Dependent Day Care Flexible Spending fund through my employer of more than $3000 for 2020.

[MinhT1]

If you already have a dependent care FSA of more than $3,000, then you cannot take the dependent care credit.

As for the reason why your refund increased, we cannot answer as we cannot see your return.

[pbix]

Thanks.  I believe I just figured it out, and I am posting the answer for the benefit of anyone else who might be in this situation:  If your W-2 shows an amount in Box 10 for Dependent Care benefits, and you don't tell TT about the amount you spent on dependent care, then the amount in Box 10 is treated as taxable income.  Entering our dependent care expenses did not qualify us for the Child Care Credit, but it did get the amount in Box 10 out of our taxable income, which therefore increased our refunds.  Moral:  Be sure to tell TT about your dependent care expenses even if you don't qualify for the Child Care Credit.