Why is my child and dependent care credit only $200? I put $5000 in my dependent care FSA and spent well over that for child care.

[DanielV01 · Accepted solution]

It's how the credit is calculated.  Your $5000 is tax-free as long as you spend it on childcare (which you did), and you can claim a credit against the remaining expenses.  However, your total expenses for determining the Child and Dependent Care Credit is capped at $6000 (not $6000 above your FSA).  The maximum amount of Child Care payments for which you can claim a deduction is $1000.  If you are in the top income category of the credit, the percentage of credit on qualified expenses is 20%.  $200 is 20% of $1000, so it appears you are receiving the max credit you can claim.

[Anonymous]

That makes sense. I changed jobs in June of 2017. I only paid about half of the 5000 most likely. So the credit I got may have been 6k minus around 4k times .2. Last year my credit was $800. Does that calculate correctly?

[Anonymous]

Actually that would be $2000 of fsa contribution and $4000 * .2 = $800 credit.

Where on my 2017 w-2 can I see how much I contributed to fsa?

[DanielV01]

Box 10

[Anonymous]

Makes sense. Thanks!