Question
My wife & I aren't eligible for the dependent care credit but entering what we spent on dependent care increases my refund. Why is that?
My wife & I get $5,000 of employer-provided dependent care benefits (we each have a dependent care FSA and set aside $2,500 pre-tax each year), we get $2,000 as a child & other dependent tax credit, but we don't get any benefit by entering our dependent care expenses (incomes are too high). I get through to the end of that section in TurboTax - entering $7,210 in expenses and getting the 'you don't qualify' message - but then my state and federal refunds go up. Why would they change if we don't qualify?
