Dependent Care Credit Question

[Jo2140]

My spouse and I both have Dependent Care FSA's of $5,000 each. We had daycare expenses of $13,000 for our one child. I thought the $3,000 would be eligible for the credit, but Turbo Tax is adding $5,000 to our income and not giving us the credit at all. Is this correct?

[MaryK4 · Accepted solution]

The maximum amount that can be excluded from taxable income for child care expenses is $5,000 so the $5,000 of additional income is correct.  For the child care credit, any employer provided benefits are deducted from the amount of your credit.  Since the max for one child is $3,000 you cannot claim the credit.