Question about Line 10 in W2

[wdskar]

Do I put the amount that my employer put in line 10 if that money was taken from my wages, put into a FSA to pay for childcare and NOT reimbursed by my employer?

[BillM223]

In a word, yes. Box 10 contains all contributions to your Dependent Care FSA, whether by your employer or by you through payroll deduction.

NOTE: the IRS already has a copy of your W-2, so what you send with your return had better match what the employer sent.

[wdskar]

This is what confuses me.  Turbo Tax says this:

Box 10 should have an amount only if you have dependents and your employer paid for dependent care benefits. These types of benefits can include:

• Money you put into a flexible spending account and used for out-of-pocket dependent care expenses that your employer will later reimburse you for
• Paid leave used for taking care of young children or disabled family members
• Employee tax benefits offered by your employer as part of a program administered by the IRS for dependent care

If this doesn't apply to you, this box shouldn't have an amount and you can leave it blank.

However my employer doesn't reimburse me.  It's my own income deduction that covers it.

I guess what is frustrating is that my tax refund appears to be greater if I add the $5000 back into my income and then the dependent care credit is corrected to the full amount I spent...

[ColeenD3]

An FSA is funded with your own income deduction. It is not funded by your employer. Enter the Box 10 amount on your W-2. You have the option of having your child care paid for by an FSA or out of your own pocket. Once the FSA is chosen, you can't get a credit since the FSA paid the fee, not you.

A Flexible Spending Arrangement (FSA) is a special account you set up with pre-tax contributions to use for medical or dependent care expenses.  These contributions aren't included in your taxable wages reported on Form W-2. You can pay from or be reimbursed from your FSA account as you incur expenses.

Amounts contributed to an FSA aren't subject to federal income tax, Social Security tax, or Medicare tax, allowing your medical or dependent care expenses to be paid with pre-tax rather than after-tax income.

[wdskar]

This is helpful.  However it is interesting how much the tax refund is affected without the amount in this box.  Even if I added $5,000 back into my income and then take out the $5000 from the FSA, the refund goes up about $1,500.  It makes me feel like I have missed a step in the claims and deductions because it doesn't seem like this would effect my taxes that much.

[FangxiaL]

If you have only one dependent and used pre-tax dollars ($5,000 in box 10) to pay for dependent care, then the dependent care credit is not available to you. For planning purpose, if you are in higher tax bracket, you would be better off to do it this way (ask employer to withhold the $5k). If you spend less than the $5,000 reported in box 10, the difference between the $5,000 and actual childcare expense is added back to your wages. 

[Critter-3]

No matter what happens to  the bottom line   you must enter the box 10 amount in the W-2 entry screen properly and it must be reflected on the form 2441  ... failure to do so will get you an IRS audit letter later.