Dependent Care FSA and Child and Dependent Care Credit

[Max_and_Emmy]

I had over $10,000 in child care expenses for 2022. I contributed $2,700 to a Dependent Care FSA.

My understanding is that the $2,700 would be subtracted from the $10,000 and that I would still have $3,000 in eligible expenses for the Child Dependent Care Credit. TurboTax correctly subtracts the $2,700 from the $10,000 to say I have $7,300 in expenses, however the summary screen subtracts the $2,700 again.

Eligible dependent care expenses: $3,000

Dependent care benefits from your W-2: $2,700

Expenses eligible for credit: $300.

Since my expenses exceeded $5,700 ($3,000 + $2,700) I should be able to use the DCFSA and have a full claim on the Child and Dependent Care Credit. What steps must I do to use both?

[xmasbaby0]

Do you have one child?  The child care credit changed for 2022.   It is not $10k and none of it is refundable.  The childcare credit is less and can only reduce your tax owed.  It is not added to your refund.

https://ttlc.intuit.com/questions/1900643-what-is-the-child-and-dependent-care-credit

[Max_and_Emmy · Accepted solution]

The system is correctly calculating my credit. I had a misunderstanding that different expenses could be used for the two different tools, (DC FSA and C&DCC)

IRS Topic No. 602 Child and Dependent Care Credit

"If you received dependent care benefits that you exclude or deduct from your income, you must subtract the amount of those benefits from the dollar limit that applies to you."