My employer offers dependent care FSA, and I had put money in there for child care purposes. My wife is self-employed but it looks like she will report a net loss this year, which means that technically the money in the DCFSA is not eligible for tax deduction.
This is my first time using the DCFSA. Will I be penalized for claiming the reimbursement from my FSA? Or will that money just be reported as taxable income (as in, I just have to pay the taxes on that money)?