Question

Dependent care credit with unused FSA

Forum|Forum|6 years ago
April 25, 2020
1 reply
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Hello,

I have an unusual situation here. I switched employers towards the end of last year, and at my old employer, I had a dependent care FSA, that I contributed to maximally pretax. After I quit my job, I was not able to reimburse any of my childcare costs from that account anymore, so I lost all the money I paid into it.
Now, as for the 2019 tax, when I enter my W2 information, it shows up and reduces my refund even though I was never able to use the money. Also, I would like to claim child tax credits for the expenses I incurred. How do I enter in Turbotax that I was not able to use any of the money that was contributed to the FSA account towards my expenses?

Thank you for your help!

DawnC

Employee

When you enter the W-2, the amounts will show as taxable (even though they were pre-tax) until you enter the expenses. So, you should go ahead and report your child care expenses you incurred. When you do, the taxable wages will be reduced and your refund will go back up.

In the search field in TurboTax, search for child care credit.

Select the Jump to link and we'll take you right there.

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T

thombos617Author

Thank you for your reply. Just to be sure I did not use the FSA to pay the expenses, I paid into the FSA pre-tax and paid ALL expenses post-tax, as my ex-employer did not allow me to use the funds I paid into the FSA.

DawnC

Employee

It will work out when you enter your expenses. You should enter your W-2 as is. Then enter the expenses you paid for out of pocket. TurboTax will do all the math and reduce your taxable income and/or apply the dependent care credit.

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