Can I use both Dependent Care FSA and Child Care Credit? How to in FreeTaxusa
I am married filing jointly with my wife. We have 2 kids in two separate daycare. We both have Dependent care FSA through our jobs and we contributed a total of $5000 between us. We want to claim the Child care credit since the IRS allows you to apply up to $6,000 of dependent care expenses to your taxes (2 or more qualifying kids). In our case it would be $1000 ($6000 - $5000).
- Am I right about this?
- How do I actually claim this using Freetaxusa? Under deductions/credits > Child care credit : I can enter my childcare provider name and address etc. It then ask "how much do you pay for each person's childcare?
A. Do I input the actual total amount of childcare for the year (e.g ) for each child which would be thousands of dollars? OR
B. Do I input the $1000 under ONE child and leave the amount under the other blank?
FYI: When i do option (B), I see my refund increase at the top of the screen, however I get a message stating:
" Unfortunately you don't qualify for the child care credit for the following reasons:
You have zero child care expenses eligible for child care credit because you participate in a dependent care benefit plan through work. Dependent care benefitS taken out of your wages reduce the amount of child care expenses available for the credit.
This confuses me as on one hand I see the refund increasing and on the other hand I am getting this message. I need to know if I am doing the right thing. Thanks in advance
Answers
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Thanks for asking. Typically, if your FSA does not meet the IRS maximum for the dependent care credit, a portion of what you paid out of pocket will be eligible for the credit. In your case, it seems that it would be most helpful to contact Support from within your account so that a helpful customer support agent can view your account, discuss specifics with you, and be able to determine how everything is being calculated.
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Thanks for your response. I did figure it out.
