Question

Can I contribute to a dependent care FSA and write off child care expenses (less amount contributed to dependent care FSA)?

Forum|Forum|7 years ago
June 5, 2019
1 reply
0 views

Annual child care expense: $10,000
Amount contributed to dependent care FSA: $5,000

Can I write off the remaining $5,000 child care expense ($10,000 annual cost minus $5,000 annual contribution amount)?

TurboTax Premier Online

B

BillM223

You can perhaps write off another $1,000 of the $5,000. Please see the following:

In terms of the Child and Dependent Care Credit, your limit is based on how many children you are reporting.

To quote the IRS:

"The total expenses that you may use to calculate the credit may not be more than $3,000 (for one qualifying individual) or $6,000 (for two or more qualifying individuals)" - https://www.irs.gov/taxtopics/tc602.html

If you have one qualifying child and you spent the entire $3,000 in the FSA, then that's all the expenses allowed for the credit. Note that expenses reimbursed by the FSA are not eligible for the Child and Dependent Care Credit.

Families with two or more children who max out the FSA reimbursement at $5,000 can take up to the next $1,000 in expenses for computing the Child and Dependent Care Credit. This would take you up to the $6,000 limit for expenses for the credit.

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D

devils2000sccAuthor

What should I enter for child care expense when I get to the deductions and credits section of my return? Should I enter the full $10,000 annual cost or just $5,000 ($10,000 annual expense minus $5,000 dependent care FSA contribution)?