Excess Dependent Care Benefits Shown as Employer on City Return

[zahhhmbie]

My wife and I accidentally contributed an extra $250 to our dependent care FSA beyond the $5,000 maximum. This excess contribution is rightly considered additional income for the tax year, but on our city return the excess is being reported on two lines as an employer. This is preventing me from completing our city return within TurboTax.

The income table looks like this:

Employer 1 — Income 1

Employer 2 — Income 2

Dependent care benefits — $202

Dependent care benefits — $48

I'm being asked to provide the employer ID and address for each 'dependent care benefits' line.

[BillM223]

This $250 was originally withheld from your Wages by your employer (whichever employer gave you the W-2 with the entry in box 10).

So this $250 is still money from the same employer, even if this is reported oddly.

If you can, just enter the information from your W-2 (I am not sure what information your state is asking for), because this is where the money came form in a roundabout way.

Does that work for you?

[Downtime1900]

I have a similar situation, but instead of accidental contribution over the maximum, my wife and I ended up pulling our children out of daycare, thus leaving a balance. It is my understanding that any unused contributions are forfeited at the end of the year. Is that considered income if we are unable to use it? The remaining balance is showing up as an Employer on my city returns like the original post. Do we need to use the Employee ID of the applicable employer for which those funds were withheld? Thank you in advance.

[BillM223]

"It is my understanding that any unused contributions are forfeited at the end of the year."

This depends on your employer's FSA plan.

You should go check with your benefits person to see if you can carry any part of this over to next year.