FSA and child credit with foreign income from one spouse

[shankarraman]

Hi, my wife worked and paid taxes abroad in 2025, which I entered under General Income in the Foreign Taxes section of Deductions and Credits. However, the system does not permit me claim appropriate dependent credit on Form 2441 and adds back my own FSA contribution for dependent care back as taxable income because it doesn't seem to recognise that both spouses earned income (which is, as I understand, the requirement for dependent care credit). Nor can I seem to change the entries in 2441 manually. Any help or suggestions would be most appreciated! Thanks in advance, Shankar.

[MaryK4]

You need to enter it as Foreign Earned Income and Exclusion, which you will find under Less Common Income in the Wages and Income area of TurboTax. Choose the Statement from my Employer option on the screen that says What form was your foreign income reported on. You will then see an option to enter your wages on the screen that says Enter your Foreign Earned Wages. You wages will appear on line 1(h) of your Form 1040 as Other Earned Income and trigger the Child Tax Credit.

[shankarraman]

Thank you! So, just to make sure i have understood: I enter it under Foreign Earned Income but I don't exclude it. And then I go to the Foreign Credit section to request credit for the taxes paid on that income? Sorry to be so dense...

[MaryK4]

Yes, that is correct.  @shankarraman