FSA- Dependent Care and Nanny Taxes

[D3siverl]

Hello, 

This year I took out the max 5k pre-tax for childcare on my FSA. I am spending way more than that plus Nanny taxes for part of the year. Will I be able to get anymore childcare tax back for 2 children? Or does the pre-tax replace the credit?

[evelynm]

This example is a great explanation:  There is a maximum expense that can be attributed to one child, or to two or more children. It's $3,000 for one child and $6,000 for two or more children. If you contribute $3,000 or more to your FSA and you have the one child, then there are no dollars left to use for calculating the credit. If you have two or more children and spend $6,000 on them and also have $5,000 contributed to your FSA, then the first $5,000 is the limit for the FSA, which leaves $1,000 that can be applied to the credit.

The total credit is $6,000 max, with or without an FSA. 

See this link for further details:  Child and dependent care expenses 

[DashonnonH]

Yes, a FSA is a pretax funds that are taken into consideration when calculating the Child and dependent tax credit. 

The total expenses that you may use to calculate the credit may not be more than $3,000 (for one qualifying individual) or $6,000 (for two or more qualifying individuals). Expenses paid for the care of a qualifying individual are eligible expenses if the primary reason for paying the expense is to assure the individual's well-being and protection. If you received dependent care benefits that you exclude or deduct from your income, you must subtract the amount of those benefits from the dollar limit that applies to you.

You can review more on this topic with the link below

https://www.irs.gov/taxtopics/tc602

Thank you for joining us today!