W2 shows Dependent care benefits, but not claimed even though we had expenses

[naga2054]

Hi, 

My spouses company had some split year policy which she was unaware of. 

So, we did contribute to child care FSA but she couldnt claim the money as the benefits manager said they got expired because of "split year policy".  We did have real daycare expenses, but couldnt claim since we were late.

I understand that we lost our unclaimed money

Now that amount shows  up on our W2  in box 10 as around 2.2K, will this restrict our claimable child care credit by 2.2K in form 2441 ?

[DMarkM1 · Accepted solution]

Not at all.  You still had childcare expenses that you incurred in 2022 that were not paid with FSA funds.  Those expenses will be used to claim the Dependent Childcare Credit.  When you enter your form W2 in the federal interview you will be asked questions about the amount in box 10.  You would answer "Yes, you had an FSA" and in the box show the amount in box 10 as the amount that was forfeited.  That will then allow all the childcare expenses up to your limit to be used for the credit.  Basically the amount in box 10 was never received; it was not in your income and was not used to pay childcare.

In the "Deductions and Credits" section using the "Dependent Care Credit" topic you will enter your provider and childcare expense information for the credit.