My wife and I both claimed $5000 FSA Dependent care. The max is $5000 per household. Can I correct this in Turbo Tax by paying taxes on the additional $5k we claimed?

[Opus 17]

Yes. Turbotax will do that automatically, assuming that your FSAs are properly entered in box 10 of your W-2s, and you complete the dependent care interview on the deductions and credits page.  (I guess that's not exactly automatic, but you know what I mean.)

[gte308e]

Ok just to be clear.  I should go ahead and get reimbursement for the whole $10k (this is for 2018 tax year) and when I do my taxes next year TurboTax will automatically tax me $5k of it...assuming that FSAs are there on the W2s.

[Opus 17]

This is for 2018?  Not the current tax season?

If you and your wife both have FSAs for 2018, you will want to submit reimbursements for both so you can get the money out.  At the end of the year, your tax return (Turbotax or anyone else) will detect the fact that your FSA was too large, and the excess will be added back to your taxable income.  Fortunately, there is no IRS penalty for over-using an FSA, just the income tax.  The tax effect will be as if you had one $5000 FSA and paid the rest of the expenses with after-tax dollars.

The alternative is not submitting claims, which means you forfeit the money and still have to pay the expenses, and you really don't want to do that.

[tinka6530]

Hi there, 

Does anyone know if this is still the case? My husband and I did the same thing last year (2023). I entered my W-2s with the information showing we each took out 5K for the dependent care FSA. Will TurboTax automatically add the extra $5,000 back into my taxable income or do I need to manually input it as other income?

Thanks!

[LeticiaF1]

Yes, TurboTax will handle calculating the taxable income if you had excess dependent  benefits.   Make sure to review all the questions in the dependent care section of the return.  To go back to the dependent care credit section:

1. Sign in to TurboTax.
2. Select either Edit or Pick up where you left off under Deductions and Credits.
3. Select You and Your Family.
4. Select Start/Review next to Child and Other Dependent Tax Credits.

@tinka6530