Dependent Care Credit & FSA

Forum|Forum|3 years ago
February 7, 2023
1 reply
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Turbo Tax is stating we don't qualify for the Dependent Care Credit. My W2 shows $5,000 in dependent care benefits in Box 10, which reflects the money I contributed to an FSA. We have $14,431 in childcare expenses and meet the other requirements for the Dependent Care Credit (both working etc.). I understand the FSA money should be subtracted from the $14,431, but this still leaves $9,431 that should qualify, right? I understand only $3,000 of the $9,431 would qualify based on the max for one child. At 20% (based on our AGI), shouldn't we be seeing $600 back on our return?

Opus 17

Level 15

The credit does not stack on top of the dependent care benefit. You have already used up your $3000 eligibility by using a $5000 FSA.

nridhibhAuthor

Level 2

Thanks for your response. To clarify, because I already received over $600 in tax benefits ($600 being equivalent to 20% of the $3,00 dependent care credit limit) through my FSA?

Mike9241

Level 15

@nridhibh i would suggest you look at form 2441. that's where the credit is calculated. start with part III because you got dependent care benefits.

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with 1 qualifying child you would get no credit with 2 or more you would at most get a credit of from 20% to 35% (the excess of $6K over the $5K of benefits) based on your agi but could b less if your tax liability was less than the credit