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rocio6858
New Member

We file MFS. If we have dependent care FSA each $2500, I claim our children as dependents. Would my spouse claim them as nondependents? Would his $2500 become taxable ?

 
6 Replies
SweetieJean
Level 15

We file MFS. If we have dependent care FSA each $2500, I claim our children as dependents. Would my spouse claim them as nondependents? Would his $2500 become taxable ?

Okay, why are you filing separately? It costs more taxwise than Joint..
SweetieJean
Level 15

We file MFS. If we have dependent care FSA each $2500, I claim our children as dependents. Would my spouse claim them as nondependents? Would his $2500 become taxable ?

rocio6858
New Member

We file MFS. If we have dependent care FSA each $2500, I claim our children as dependents. Would my spouse claim them as nondependents? Would his $2500 become taxable ?

Because it makes sense for my family at the moment.
Opus 17
Level 15

We file MFS. If we have dependent care FSA each $2500, I claim our children as dependents. Would my spouse claim them as nondependents? Would his $2500 become taxable ?

No and yes.

In this situation, only the spouse who claims the child as a dependent can use an FSA.  The other spouse either forfeits the money, or, if the money is paid out, it is added to their taxable income.

If you pay care expenses for 2 qualifying children, you could each claim one child as a dependent and claim the specific expenses for that child.

The ability to use a child to qualify for the dependent care credit as a "non-dependent" only applies to parents who live apart and share custody, those special rules can't be used by parents who live together (and either file MFS or are unmarried.)  Each child can be claimed by one and only one parent who gets all the tax benefits that apply in your situation.

Also note; your FSA administrators require that you certify that the expenses qualify for reimbursement.  If one of you is certifying expenses but you know you won't be claiming the child, then you are falsely certifying non-qualifying expenses.  Probably nothing will come of it (other than having to pay tax on the money) but the administrator is supposed to do due diligence and only pay legitimate claims so there is a slight risk that if the employer or plan administrator was audited, they could be fined by the IRS.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
Critter
Level 15

We file MFS. If we have dependent care FSA each $2500, I claim our children as dependents. Would my spouse claim them as nondependents? Would his $2500 become taxable ?


FYI ... when you file separately NEITHER of you may claim the dependent care credit form 2441  and you BOTH have to add that amount back to your income since the deduction is not allowed when you file MFS.   Another reason filing separately is not recommended.
Opus 17
Level 15

We file MFS. If we have dependent care FSA each $2500, I claim our children as dependents. Would my spouse claim them as nondependents? Would his $2500 become taxable ?

One parent can still use an FSA up to $2500 when filing MFS.  But you can't apply remaining amounts over the $2500 to the dependent care credit, as you could if filing single, HOH, or MFJ.
*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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