Depcare FSA

Forum|Forum|3 years ago
February 4, 2023
2 replies
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We just had our first child and I want to start contributing to the max allowed limit of $5K for Depcare FSA. We are MFJ and I wanted to check if we both have to put $2500 each through our employers or I can put the whole $5K myself since we are MFJ

Best answer by AliciaP1

You can contribute just yourself and claim it on your MFJ return as long as you meet the requirements to claim. The credit is worth as much as 35% of your qualified expenses, up to $3,000, (for one qualifying person), and $6,000 (for two or more qualifying persons). Your percentage depends on your AGI, with the higher percentages applying to lower incomes and vice-versa.

To qualify for this credit, you must meet all of these criteria:

You (and your spouse, if filing jointly) must have earned income
- The earned income requirement for one spouse is waived if they were a full-time student or disabled (if they lived with the other spouse for more than 6 months in 2022)
You paid caregiving expenses so that you (and your spouse, if filing jointly) could work or look for work
- The work/look for work requirement for one spouse is waived if they were a full-time student or disabled (if they lived with the other spouse for more than 6 months in 2022)
You paid a caregiver to care for a Qualifying Person. The caregiver can't be:
- Your spouse
- Your dependent
- Your child if they were under 19 on the last day of 2022, even if not your dependent
- The parent of the Qualifying Person, if the Qualifying Person is your child under the age of 13 during 2022
Your filing status is not Married Filing Separately (except under certain circumstances)
You can provide the care provider's name, address, and their SSN, ITIN, or EIN on your return (unless it's a tax-exempt organization)

AliciaP1Answer

Level 13

To qualify for this credit, you must meet all of these criteria:

You (and your spouse, if filing jointly) must have earned income
- The earned income requirement for one spouse is waived if they were a full-time student or disabled (if they lived with the other spouse for more than 6 months in 2022)
You paid caregiving expenses so that you (and your spouse, if filing jointly) could work or look for work
- The work/look for work requirement for one spouse is waived if they were a full-time student or disabled (if they lived with the other spouse for more than 6 months in 2022)
You paid a caregiver to care for a Qualifying Person. The caregiver can't be:
- Your spouse
- Your dependent
- Your child if they were under 19 on the last day of 2022, even if not your dependent
- The parent of the Qualifying Person, if the Qualifying Person is your child under the age of 13 during 2022
Your filing status is not Married Filing Separately (except under certain circumstances)
You can provide the care provider's name, address, and their SSN, ITIN, or EIN on your return (unless it's a tax-exempt organization)

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puneetswami9Author

Level 2

Thanks a lot.

Understood the credit % point.

i was referring to the $5000 pre-tax dollars that one can put in a depcare FSA.

can I do both? I.e. contribute 5K pretax from my payroll and then also available tax credits upto 3K as you said?

AliciaP1

Level 13

Yes, the pretax dollars you contribute are factored into the dependent care credit when you enter your W-2. Later, you can enter the amounts paid for dependent care to a qualified caregiver and TurboTax then populates your allowable credit. It may not be the full $3,000 depending on other factors, but TurboTax will report the highest credit you are allowed given your specific situation.

@puneetswami9

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