On my W-2 Form, it shows that I have FSA for dependent care for $5000. That was deducted form my paycheck bi-weekly and is paid 100% by me and not my employeer. Box 10 (Dependent care benefits) is blank.
My total child care cost $8044. When I a reporting what I paid for child care, do I dedcut $5000 from the $8044? Therefore, I am only allowed to claim $3044 for childcare?
Even though the $5000 was deducted from my paycheck this was still used to pay the $8044 for childcare and it was all my money not from the company.
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Yes. With one child, up to $3000 of expenses ($6,000 of expenses paid for two or more Qualifying Persons) can be applied toward the credit. If you paid $5000 through an FSA, the remaining $3,044 will be applied to the credit. In TurboTax, enter your total expenses paid for the year. Your FSA amount would be pulled from your W-2 (box 10) and TurboTax will ask some additional qualifying questions, and perform all the calculations. Form 2441 will show the amount applied against the FSA and the remainder applied to the credit.
If you employer did not put this amount in your W2 (box 10), then you should list it in box 10, as you enter the W2. For the calculations to perform properly this is the correct way to handle it in TurboTax. The FSA, even though paid by you, was paid with tax free funds so it must be accounted for.
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