I paid for dependent care $2738 from FSA, but TurboTax shows a total of $5238

[twasilczyk]

In 2019, I had $5000 on my DCFSA account of which I used $2738 for preschool (all the rest I used in 2020). Thus, I don't expect any credit since this was all pre-tax money, but TurboTax still gives me $48 and a total sum of expenses $5238 (where does this number come from?).

In the first step of going through child expenses, TurboTax asks "How much did you pay for X care in 2019" and reminds to "include money paid from FSA". I entered 2737.50 (rounded to 2738) - all from FSA. Summary showed Amount=238.

In the next step (after clicking Done), "Here's what you spent on care providers", I entered details of this sum, a single entry for preschool with Amount paid = 2737.50.

Next, I'm getting the summary as follows:

Eligible dependent care expenses $5,238
Dependent care benefits from your W-2 or business schedules -$5,000
Expenses eligible for credit $238
Credit percentage 20%
Your Child and Dependent Care Credit $48
Dependent care benefits you must pay taxes on $2,500
Your expenses of $3,000 are reduced by the $5,000 from box 10 of your W-2

I have no idea where the number of $5,238 comes from. I didn't pay this much even until end of DCFSA grace period.

[AmeliesUncle]

Are you filing as Married Filing Separately  (and did not live with your spouse during the last 6 months of 2019)?

[twasilczyk]

Exactly the opposite: Married Filling Jointly and lived with my spouse during whole 2019.

[AmeliesUncle]

Double check that you entered your marital status correctly, because Married Filing Separately would explain what is going on.

The other explanation that I can think of that MIGHT do that is that your spouse only had $2500 of income.

[twasilczyk]

I double checked, I am Married Filling jointly (checked second box on page 1 of Form 1040).

My spouse had no income through the whole year.

[AmeliesUncle]

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@twasilczyk wrote:

My spouse had no income through the whole year.

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That is the problem.  In order to qualify, both spouses need income.  However, there is an exception if the non-income spouse was a full-time student or was disabled.  Did you tell the program that your spouse was a full-time student or disabled?  If so, how many months did you say that was the case?  Do you have more than one child under age 13?

[twasilczyk]

Well, my spouse was a full-time student indeed (remote learning overseas, so she wasn't eligible for education credits). It was 10 months in 2019 and I have one child under 13.

What puzzles me, is why am I getting any credit ($48) since all I paid was from pre-tax FSA? And where the amount of $5,238 comes from. I would expect not getting any credits.