overcontribution of dependent care FSA in 2023

[frolicsome]

My wife and I contributed $10k to dependent care FSA in 2023. We spent >$10k in child care for a child in 2023. We have claimed back $10k using the child care expense. However, the dependent care FSA limit is $5k per family in 2023. The TurboTax 2023 Premier seems not correctly to handle my situation. After I input my child care information, in Form 2441, line 12 is $10,000. Line 14 (If you forfeited or carried over to 2024 any of the amounts reported on line 12 or 13, enter the amount. See instructions) is ($10,000). Line 15 is 0. Line 25 (Excluded benefits) is 0. Line 26 (Taxable benefits) is 0. Additionally, I got $600 tax credit from eligible dependent care expenses of $3000 for a child. This seems to be too good to be true. I don't need to treat extra $5000 overcontributed money as the taxable income (as form 1040 1e is 0) and also get the child care credit. Is there something wrong with TurboTax 2023 Premier?

In my understanding, line 14 should be 0 while line 15 should be $10,000. Lines 25 and 26 should be $5000 and $5000, respectively. 

Please let me if my understanding is correct. Thanks.

[Mike9241]

if you spent both FSA in 2023 there is nothing left to carry over to 2024 so 

line 14

line 14 the total of the following amounts included on line 12 or 13.
• Any amount you forfeited. You forfeited an amount if you didn't
receive it because you didn't incur the expense. Don't include
amounts you expect to receive at a future date. you forfeited nothing because you said you used the $10K to pay for child care expenses
• Any amount you didn't receive but are permitted by your
employer to carry forward and use in the following year. there's nothing you can carry forward because you say you spent it all.

turbotax does not complete lines 13 or 14 you do by answering those questions.

based on what you provided $5k should be on 1e

[frolicsome]

Thanks. No money in DCFSA was forfeited as I used both $5000 or was carried over to 2024 any of the amounts. That's why I said line 14 should be 0. TurboTax didn't ask me this question. It automatically filled line 14 as (10,000). I agree with you that "based on what you provided $5k should be on 1e". However, it is $0 on 1e in our 2023 tax return. That's why I asked the question here. I think TurboTax did something wrong this year.

TurboTax 2022 premier worked in my 2022 tax return last year, i.e., 1e was $5000 in 2022. We contributed $10,000 to DCFSA in both 2022 and 2023.

[BillM223 · Accepted solution]

"After I input my child care information, in Form 2441, line 12 is $10,000." The $10,000 is the sum of the two box 10s on your 2 W-2s.

"Line 14 (If you forfeited or carried over to 2024 any of the amounts reported on line 12 or 13, enter the amount. See instructions) is ($10,000)" - Is ($10,000) supposed to be a negative number? If this supposed to be a positive number, this number happens when in the W-2 interview, you indicated that No, your employer did not provide child care, and yes, you had a Flexible Spending Account, of which 5,000 was left in the account at the end of the year. (times two, for the two W-2s).

NOTE: TurboTax does ask you about the amount to go into line 14, but it does it in the W-2 interview, not the 2441 interview. In the W-2 interview, after you have entered your data, there are additional screens, some of which ask about your FSA. You are asked if there was any money left over in your FSA at the end of the year (go look and see). Any amount you put here is added to line 14 (which is why I asked if the (10,000) represents a negative number).

[frolicsome]

Thank you so much. BillM223. I understand line 12 is the sum of W-2 box 10. On line 14, the parenthesis is on the 2441 form. The number in the parenthesis is 10,000. It is a positive number in the parenthesis. Our employers did not provide child care. We do both have DCFSA in 2023. All 10,000 were used for the child care cost (>10,000) occurred in 2023.

I guess I will need to check the W-2 interview and see if line 14 in 2441 will turn into 0, which should be the correct number for us.

[frolicsome]

You are correct. As you suggested, I used the W-2 interview to resolve the issue. The line 14 is 0 now, and the line 15 is 10,000 in form 2441. We have a Taxable benefits of 5,000 on line 26 of 2441, which is transferred to 1e of 1040.

Thank you for the help!