Tax Year Prior to 2020: Dependent Care FSA enrollment while spouse was unemployed

Forum|Forum|7 years ago
June 1, 2019
1 reply
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I mistakingly signed up for a Dependent Care FSA and received reimbursement when my spouse was unemployed (I did not fully read the rules for eligibility and was unaware of the rules when I filed my claim for reimbursement). My husband has been actively looking for work but did not earn an income during the time that I contributed to the FSA. How do I correct this mistake on my tax return so that I am properly paying taxes on the money I was reimbursed?

TurboTax Deluxe Mac

O

Opus 17

Employee

It will be corrected on form 2441. Your FSA will be captured from your W-2, and you will be asked additional questions about whether you forfeited any amounts, how much you paid for care, and who the provider and dependent were. Because your care will be non-qualified (due to no spouse job), the amount taken from the FSA will be added back to your taxable income. Fortunately, there is no additional penalty, just the income tax.

B

bryan99999

Variant of this question--What happens if my spouse is underemployed. For example, if spouse is only earns $3,000, but a $5,000 dependent care flex spending account was opened. Spouse was looking for, but unable to secure, additional work.

Can we take $3,000 out of flex spending, pre-tax, and then file a form 2441 for the remaining $2,000 as taxable income?

Sorry, confusing, we know. THanks in advance