I paid for child care using a dependent care FSA. Can I still claim the child care credit?

[punit75]

I paid $4500 for one child for Day Care and had $3500.00 deducted for FSA from my Payroll, can I claim $1000.00 on form 2441?

[Bsch4477]

No, because the $3500 from your FSA satisfied the maximum amount of $3,000 per child that can be used to claim the credit.

[croce1945]

how do I report the $500 as income on tax return?

[Bsch4477]

You do not have to complete the 2441 since you will not be claiming child tax credit.

[dougieritch]

The Dependent Care FSA can be maxed out at $5,000 per year; therefore, @punit75 would not owe taxes on any of the $3,500 they contributed. The $3,000 limit applies only to the Child Care Credit. See the following Q&A: <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3435214">https://ttlc.intuit.com/questions/3435214</a>

[Bsch4477]

dougieitch---you are correct.  No tax on the additional $500 should be levied.

[Bsch4477 · Accepted solution]

No.  You can only claim expenses out of pocket.

[Taxpaul-EA]

This answer is correct. The purpose of FSA is to paid for childcare expenses.  It is a tax savings method.

[bdgaryz]

For me I am learning it is not tax savings.  for two kids I had 15,000 in daycare.  FSA was 5,000.  I dont understand why in Box 3 of Form 2441, the 5,000 is deducted from the max amount allowed to enter of 6,000.  It would seem more fare if box 3 was 15,000-FSA but no more than 6,000 so I still get a credit of 20%*6,000.  Instead, my box 3 is 6,000-FSA left with $120 credit.  I lost 1,000 of credit by using 5k for FSA, which payroll tax saved off 5k was not 1,000

[Bsch4477]

Not only did you not pay payroll tax on the 5K but you also did not pay income taxes on that amount.