My child care expense exceeds $5000 but it still says that "your $xxx in care expense wasn't enough to use up the $5000"?

[kha0518201]

I paid much more than $5,000 in child care expenses in 2019. I input all information and it still says that
"Since your $xxx in care expenses wasn't enough to use up the $5,000 you contributed to your employer's dependent care plan, your Child and Dependent Care Credit is $0.
The $xxx of unspent care benefits will be added to your W-2 as taxable income."
I think this is an error?

[Carl]

Your childcare expense deduction is maxed out at $5000. Since you put $5000 of *before* tax money in an FSA account and used that $5000 to pay for child support *BEFORE* any out of pocket expense for this was incurred, you do not qualify for any of the deduction at all.

Remember, the $5000 used from the FSA account was "BEFORE" tax money. So you already deducted it from your taxable income *BEFORE* taxes and with holding were figured on your earnings.

[AmeliesUncle]

Have you gone back through the section to review your entries?

Are you married?  If so, does your spouse have at least $5000 of "earned" income from a W-2 or self employment  profit?

Print out Form 2441.  What is showing up in column (d) of Line 1, and column (c) of Line 2?

[kha0518201]

Thank you for the reply, I understand your point. My main question is that it says "The $xxx of unspent care benefits will be added to your W-2 as taxable income". I checked turbotax' summary page and indeed there is $xxx added to my taxable income. I think it's an error because we already spent all $5000 on child care?

[kha0518201]

Ahhh I see. So the problem was because of the income, not the child care expense. I guess I was confused by turbotax saying we didn't use up the $5000.

Thank you very much!

[AmeliesUncle]

Yeah, from what I've read that section of TurboTax often gives the wrong 'reason' for things.