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leah-mowrey
New Member

I enrolled in dependent care beginning in Jan 2016 for $5,000. My husband's open enrollment began in Sept & we did $5,000 again. Will we face a fine for overlapping?

We will both be withholding from dependent care from Sept-Dec.
We are trying to in-enroll my husband, but may not be able to.
1 Best answer

Accepted Solutions
Opus 17
Level 15

I enrolled in dependent care beginning in Jan 2016 for $5,000. My husband's open enrollment began in Sept & we did $5,000 again. Will we face a fine for overlapping?

You can't exclude more than $5000 between the 2 of you in a given tax year.  If you pay for more than $5000 of care in 2016, then the amount over $5000 will be considered non-qualified, and will be added back to your taxable income.  (Fortunately there is no additional penalty, just the income tax on the wages.)

If his plan was for 2017, or was for a different fiscal year (like October 2016-September 2017) then just don't withdraw and money from that account for care in 2016, save it for care provided in 2017.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

4 Replies
SweetieJean
Level 15

I enrolled in dependent care beginning in Jan 2016 for $5,000. My husband's open enrollment began in Sept & we did $5,000 again. Will we face a fine for overlapping?

Was Hubby's open enrollment for 2016, or effective 1/1/2017?
Opus 17
Level 15

I enrolled in dependent care beginning in Jan 2016 for $5,000. My husband's open enrollment began in Sept & we did $5,000 again. Will we face a fine for overlapping?

And is he on a different plan year than January to December.
*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
leah-mowrey
New Member

I enrolled in dependent care beginning in Jan 2016 for $5,000. My husband's open enrollment began in Sept & we did $5,000 again. Will we face a fine for overlapping?

Thank you for the help! His plan is Sept-Aug which caused the overlap. We'll plan to pay the tax for the additional contribution.
Opus 17
Level 15

I enrolled in dependent care beginning in Jan 2016 for $5,000. My husband's open enrollment began in Sept & we did $5,000 again. Will we face a fine for overlapping?

You can't exclude more than $5000 between the 2 of you in a given tax year.  If you pay for more than $5000 of care in 2016, then the amount over $5000 will be considered non-qualified, and will be added back to your taxable income.  (Fortunately there is no additional penalty, just the income tax on the wages.)

If his plan was for 2017, or was for a different fiscal year (like October 2016-September 2017) then just don't withdraw and money from that account for care in 2016, save it for care provided in 2017.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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