Being charged taxes for deducation for FSA

Question

Hello,

I have had deductions taken out for a medical FSA from my employer.

This lowers my taxes. It pretax.

When I file my taxes,  my FSA is placed in the w-2 form, 10, dependent care benefits.

The tax program asks me what the dependent care benefits was used for.  There is no area that says medical, just information for dependents.

Since I did not use the DCP properly, Then the FSA deduction goes back into my regular wages and taxed.

I'm I doing something wrong?

Thank you

MatthewD · Answer

Hi PaulJones,

I agree with JMSSGV.  Talk to your employer right away and hopefully they can clear this up before the end of the year!  A Flexible Spending Account (FSA) is pretax contributions you make to an account and can be used for dependent care costs or medical.  However, it is not reported on your W2 or your return.   Box 10 of the W2 is payments your employer makes as a benefit for dependent care benefits and if you don't use it for dependent care, then it is included as income on your return as wages (the amount and a code "DCB" will show on line 1 of the 1040 next to Wages).

Hopefully you can get that cleared up soon so you don't have to get a corrected W2 later.

JMSSGV · Answer

This sounds like something you need to straighten out with your employer. Either they've made a mistake or you're misunderstanding what you signed up for. An FSA doesn't get reported on a W-2 at all — although it can show up in Box 14, but just for informational purposes as it doesn't impact your tax situation.