DCFSA and child tax credit for amount above 5k in turbotax

[sandeep-chandna]

I contributed 5000 towards employer provided DCFSA. I imported all W2s (me and my wife's). 

I spent more than 5k on my child's day care. When I go to Child and Dependent care credit and enter 5k or more it increases my Federal and State refund substantially but I thought I can only use one of DCFSA and child tax credit. 

Am I doing something wrong ?

[Rachel_W]

I recommend that you view the imported W2 to make sure Box 10 has $5,000 for DCFSA.  Based on what you said above, it doesn't sound like your $5,000 DCFSA is not being taken into account.

If you only have 1 child, there should not be an extra credit calculating for the Child and Dependent Care Credit.

If you have 2 or more children, you would be eligible for the Child and Dependent Care Credit based on $1,000. (Maximum child care expenses for 2 or more children is $6,000 - $5,000 FSA)

The credit ranges between 35% & 20%, so your maximum credit would be between $200 and $350 credit.  ($1,000 x 20% = $200).

[sandeep-chandna]

W2 has 5k in DCFSA.
When I open 'Child and Dependent Care Credit' it asks
'You have $5k of employer provided care benefits. In order to receive this credit, your expenses below must be more than this amount'.

When I try to add the amount, it says 'Be sure to include money paid from FSA or cafeteria plan'.

If I add even $1000 here (instead of 8k - which is actual expense), it reduces my taxes. If I add full 8000 it reduces tax by $1000+

I have 1 child.

[xmasbaby0]

The child tax credit and the child and dependent care credit are two completely separate child-related credits.

Look at your 2018 tax return to see the child-related /dependent credits you received:

Child tax credit line 12a

Additional Child Tax Credit line 17b   (schedule 8812) 

Credit for Other Dependents line 12a

Earned Income Credit (EIC) line 17a

Child and Dependent Care Credit line 12     (comes from Schedule 3 Form 2441)

The dependents you listed are on the first page of your Form 1040 below your address.

https://ttlc.intuit.com/questions/1900923-what-is-the-child-tax-credit

https://ttlc.intuit.com/questions/1900643-what-is-the-child-and-dependent-care-credit

https://ttlc.intuit.com/questions/1899157-what-are-the-qualifications-for-the-earned-income-credit-e...

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

https://ttlc.intuit.com/questions/4499708-what-is-the-500-credit-for-other-dependents-family-tax-cre...

[sandeep-chandna]

Thanks. I am talking about 'child and dependent care expenses' form 2441

line 12 is 5000
line 16 is total expense - let's say 8k

line 29 shows -XXX $

i think this line 29 showing negative is what i am confused about.

[xmasbaby0]

From your original question:    " I thought I can only use one of DCFSA and child tax credit. "

The most childcare credit you are allowed to get for one child is $3000.  So the other $2000 is taxable for you.

[sandeep-chandna]

correct. That's what I thought too.

But not sure why turbotax is reducing my tax when i add any amount. in child and dependent care expenses section. Any insight will be really helpful.