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Level 1

Question

Where do I input dependent care FSA info?

Forum|Forum|7 years ago
June 3, 2019
5 replies
0 views

I made contributions to a dependent care FSA and paid more than that in actual dependent care costs. I want to make sure my return is filled out properly to that effect, but going step by step I can't seem to locate where to include that information.

TurboTax Premier Online

ChristinaS

Level 10

When you type in your W2, you will record the pretax Dependent Care in Box 10. When you visit the Dependent Care section under Deductions and Credits, you enter your expenses. The program automatically adds any excess deferral to line 7 of your tax return.

You can preview your 1040 here:

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Look at line 7 Wages. You will see a notation "DCB" for any benefits that go back into your income.

mt14

Level 2

That's fine for Dependent care FSA's that show up on your W-2, but mine is managed by a third party provider and not our payroll company so I get a separate Account Statement for my Dependent care FSA and it's not on my W-2 at all.
Where would I enter this information?

DaveF1006

Level 15

. Can you give me more information? Even though it is administered through a third party, is it sponsored through your employer and is it funded out of your paycheck and treated as pre-tax dollars?

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Skey94547

Level 2

My dependent care FSA contribution is not in box 10 on my W-2. Should I deduct the contribution from the total dependent care expenses? Turbo Tax did not ask if I made contributions.

RobertG

Level 12

No, if you just subtract the contributions from the total dependent care expenses the limitations will not be applied correctly.

If you employer did not put this amount in your W2 (box 10), and you can't get a corrected W-2, then you should list it in box 10, as you enter the W2. For the calculations to perform properly this is the correct way to handle it in TurboTax. The FSA, even though paid by you, was paid with tax free funds so it must be accounted for.

This question was previously answered by DianeW

@Skey94547

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SusanY1

Level 15

I'm having the same issue but not through a W2 but through a K1. The partnership provides a dependent care FSA and the amount we contributed is in Box 20 code AH. While I entered the amount accordingly in Turbo Tax, TT doesn't adjust the K-1 income accordingly. Is there somewhere I can enter the amount such that the FSA amounts we contributed are accounted for?

Box 20 code AH is an informational box on the K-1. It will not adjust the income. Any Flexible Spending Account (FSA) contribution should already have reduced the distribution reported on the K-1. If it has not, then the adjustment should be made on the Partnership or S-Corp return to properly flow-through on the K-1.

The same is true on a W-2. The FSA contribution is typically listed in Box 12 or 14 as a notation, but the adjustment for wages is already part of the Box 1 data.

There isn't an entry area on TurboTax for FSA contributions because they are not deductible on the tax return. In order to reduce your income, that income adjustment must be reflected on the K-1 or W-2 by reducing the distribution amount or wage.

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catsnrabbits

Level 2

I didn't use all of my FSA for dependent care in 2020. Do I need to tell them the amount I really spent vs. what they took out? The difference is over $1000. I don't want to get in trouble for not telling them but I don't see a way to add this in Turbo Tax.

Opus 17

Level 15

@catsnrabbits wrote:

I didn't use all of my FSA for dependent care in 2020. Do I need to tell them the amount I really spent vs. what they took out? The difference is over $1000. I don't want to get in trouble for not telling them but I don't see a way to add this in Turbo Tax.

Turbotax will ask for the amount spent on qualified expenses and the amount forfeit in the account (or carried over to next year). The amount of the account is recorded in box 10 of your W-2 and picked up automatically. If your expenses were less than your account but the extra was forfeited or carried forward, it is not taxable to you. If you were paid out more than your qualified expenses, the unqualified amounts paid to you will be added back to your taxable income.

For example, $5000 DCFSA in box 10, you have $4000 of qualified expenses and $1000 was forfeit or carried forward to 2021. Nothing is taxable to you.

Just report all the facts correctly.

jakubdudek

Level 2

Where do I input qualified expenses? Currently it seems turbotax is simply adding the $5000 to my income and taxing it. my summary shows my taxable income as box1+box10 and no further deductions related to the FSA.

ErnieS0

Level 15

Edited 1/21/21 3:26 PT

@catsnrabbits You only pay tax on used for unqualified expenses. Anything that you left in the account is generally forfeited, although the rules have relaxed due to Covid.

According to IRS Notice Notice 2020-29 for unused amounts remaining in a health FSA or a dependent care assistance program under the § 125 cafeteria plan as of the end of a grace period or plan year ending in 2020, a § 125 cafeteria plan may permit employees to apply those unused amounts to pay or reimburse medical care expenses or dependent care expenses, respectively, incurred through December 31, 2020.

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PattiF

Level 15

I am assuming that you had an entry in box 10 of your W-2, for your FSA contribution.

Go back to your W-2 interview (Federal->Wages & Income->Wages & Salaries) and click on Start or Revisit for "Wages and Salaries".

If you made an entry in box 10 of the W-2 (Dependent Care Benefits), then in the next several screens after the W-2, it will ask you if you have an FSA and how much money was left in it at the end of the year. This is where you would update the number.

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