Why are my Dependent Care expense amounts showing up differently than the amounts I actually entered in?

[BMcCalpin · Accepted solution]

There could be several reasons.

First, the qualifying expenses for determining the credit can be limited to the earned income of the lower paid spouse. Thus, if your spouse earned about $2,000 last year, and you paid $3,000 in child care expenses, the credit is limited to a percentage of the $2,000.

Second, if your spouse worked only part of the year, the expenses must be prorated by the number of months divided by 12.

Third, expenses are assumed to come first from a Dependent Care FSA (box 10 on your W-2). The credit is taking only on expenses in excess of the box 10 amount. However, the maximum expense that you can use towards the credit is $6,000. Since an FSA might contribute up to $5,000, the maximum expense for the credit in this case is $1,000, no matter how much you actually paid.