DCFSA question about amount and date reimbursed

[frostily0495]

I contributed 5k to 2024 DCFSA and used all of it for childcare which was provided in 2024. I have two questions while reporting it in TurboTax. 

1. I submitted the expense and got reimbursement for 2024 expense from 2024 DCFSA in Jan 2025. IIUC I can still show that in 2024 tax filling as the expense was incurred in 2024 and it does not matter when I received the reimbursement from the DCFSA provider. Is this correct?

2. My total expense for child care in 2024 was much more than 5k (DCFSA limit) and split among two providers. Do I need to show the total larger expense from both the providers or will just reporting expense from one provide (>5k) be sufficient? 

[BillM223]

1. Correct

2. If you have more then one child eligible for this credit, you would have up to $6k in expenses that you could apply to the calculations in form 2441. You want to not only justify the $5k in box 10 of your W-2, but you also want to try for the credit on the $1,000 excess over the $5k (if any). So you can enter a provider to whom you gave at least $6k.

But if you have just one child (up to $3k in expenses), then you can just enter one child care provider, because you can't get any actual child care credit anyway.

[frostily0495]

@BillM223 Thanks. Can you please help me understand (2) better. 

I had another kid born in July 2024 whom I am adding for the first time as dependent. The childcare provided who provided care for first child also provided care for newborn for sometime. Can I show 6k expense on the provider to get 6k child care credit? How do I do this in TurboTax Desktop. The workflow for child care deduction always just see DCFSA 5k contribution and just goes with that. 

Please note that after the baby was born my spouse was on parental leave all of 2024 so she was not actively working. Can I still make upto 6k claim?

[BillM223]

"Please note that after the baby was born my spouse was on parental leave all of 2024 so she was not actively working" The baby was born in July...did you mean "all the rest of 2024"?

I would treat this like how spouses who work part-time are treated. Look at Part-time work on page 6 in Pub 503.

If your spouse indeed worked part of the year, I would make a ratio between the days your spouse worked divided by number of work days in the year (220?); so you could report only the part of the day care expenses that applied to your spouse's working time.

When you list your new child along with your previous one, this will cause TurboTax to use the $6k limit.

If, however, your spouse did not work at all in 2024 but was on leave the whole time at home, then no DCFSA is allowed (i.e., you don't enter any expenses, and the Box 10 amount gets added back to Other Income.

[frostily0495]

@BillM223 Thank you. Yes sorry only part of 2024. 

Okay so I tried adding other kid expense and see this (below). So IIUC this only avoids me from paying tax on 6k - 5k i.e. 1k and credit rate on it? Is this correct?

[MarilynG1]

Yes, since you paid no tax on the 5K, that's subtracted from amount available to calculate a Child Care Credit.  So you receive a $200 credit for the $1000 you paid that wasn't tax-free.

Here's more info on the Child Care Credit.

@frostily0495