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January 29, 2020
Question

My ex and I agreed she will claim our daughter as a dep, but I used a FSA and paid for dependent care and it is on my W2. Do I have to pay taxes this money now?

  • January 29, 2020
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1 reply

January 29, 2020

I assume that you are not the custodial parent, right? In this case, your daughter is probably not a qualifying person for purposes of the Child and Dependent Care credit. 

 

Yes, in this case, TurboTax will add the employer contribution to your Dependent Care FSA in box 10 of your W-2 to your income and you will pay tax on it.

 

The IRS says:

"

Child of divorced or separated parents or parents living apart.

Even if you can't claim your child as a dependent, he or she is treated as your qualifying person if:

  • The child was under age 13 or wasn't physically or mentally able to care for himself or herself;

  • The child received over half of his or her support during the calendar year from one or both parents who are divorced or legally separated under a decree of divorce or separate maintenance, are separated under a written separation agreement, or lived apart at all times during the last 6 months of the calendar year;

  • The child was in the custody of one or both parents for more than half the year; and

  • You were the child's custodial parent.

 

The custodial parent is the parent with whom the child lived for the greater number of nights in 2018. If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income. For details and an exception for a parent who works at night, see Pub. 501.

The noncustodial parent can't treat the child as a qualifying person even if that parent is entitled to claim the child as a dependent under the special rules for a child of divorced or separated parents.

 

" See IRS Pub 503.

 

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