Can I claim Child Care Credit with DCFSA for one child? Tax filing confusion

You've got a good understanding of how this works! With your situation, you actually CAN claim the Child and Dependent Care Credit for the expenses that exceed your DCFSA contributions. Here's how it works: The maximum expenses you can use for calculating the credit is $3,000 for one qualifying dependent. Since you've already used $5,000 in your DCFSA (which is pre-tax), you've actually exceeded this $3,000 limit for credit calculation purposes. However, if your expenses were higher - like the $7,800 you mentioned - you would be able to claim the difference between your DCFSA ($5,000) and your actual expenses ($7,800), but only up to the $3,000 limit per child. Since that difference is $2,800, that's what you could potentially use for the credit calculation. The credit percentage depends on your adjusted gross income and could be anywhere from 20% to 35% of your eligible expenses. Just make sure you don't "double-dip" by claiming expenses already covered by your DCFSA.

I had the exact same issue last year with our DCFSA and childcare expenses! After hours of research and frustration, I found taxr.ai (https://taxr.ai) and it made everything super clear. You upload your documents or describe your situation, and it explains exactly what you can claim and why. For my situation, they confirmed I could claim the difference between my DCFSA and actual expenses, which got me an extra $560 back! It sounds like you might be able to claim some of that $2,800 difference too. The tool breaks down the calculation and explains which IRS rules apply specifically to your situation.

Just wanted to update that I tried taxr.ai after seeing the recommendation here, and it was incredibly helpful! I've been confused about this DCFSA/Child Care Credit issue for years. Turns out I've been leaving money on the table! With one child and $8,200 in childcare expenses last year (with $5,000 in DCFSA), I was eligible to claim a portion of the difference. The tool explained exactly how the calculation works and even showed me which forms I needed to complete. The best part was that it analyzed my specific situation and showed me how the phase-out works based on my income level. I ended up getting about $500 more on my refund than I would have otherwise!

If you're still trying to figure this out and need to talk to the IRS directly, good luck getting through to them! I spent 4 hours on hold last month trying to get clarification on this exact topic. Finally found Claimyr (https://claimyr.com) which got me connected to an IRS agent in under 20 minutes. They have this cool system that holds your place in line and calls you back when an agent is available. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that with one child, I could only apply the Child and Dependent Care Credit to expenses beyond what I paid through my DCFSA, and only up to the $3,000 limit. Since I had already used $5,000 in my DCFSA for one child, I couldn't claim additional credit. But if you have more than one child or your situation is different, definitely worth checking!

I have to eat my words and apologize for being so skeptical about Claimyr. After I posted that reply, I was still desperate to get through to the IRS about my amended return, so I figured what the heck and tried it. IT ACTUALLY WORKED. I got connected to an IRS agent in about 15 minutes! After trying for literally 3 months on my own with no success. The agent was super helpful and explained exactly what was happening with my amended return. While I was on with them, I also asked about this DCFSA/Child Care Credit situation since I have a similar setup. The agent confirmed that with one child, once you've used $5,000 in DCFSA funds, you've already exceeded the $3,000 limit for the Child Care Credit for one dependent. But if you have two or more kids, you could potentially claim more (up to $6,000 total for the credit calculation). Sorry again for being such a jerk in my previous comment. Sometimes good things actually work!

This might be a bit of a tangent, but if your employer offers DCFSA, make sure you're maxing it out! My wife and I didn't realize we could be contributing pre-tax dollars to this and we missed out on significant tax savings for 2 years. For those in higher tax brackets, this can save you over $1,500 a year depending on your federal, state, and local tax rates. Also, just a heads up that the 2025 DCFSA limit is increasing to $5,100 per household (up from $5,000), so adjust your elections accordingly if you're still in the daycare phase!

Hold up - I think there's still some confusion here. The Child and Dependent Care Credit and DCFSA interaction is more nuanced than some are saying. If you have $7,800 in actual expenses and contributed $5,000 to DCFSA, you CAN claim part of the difference for the credit. The calculation works like this: 1. Maximum expenses considered for one child: $3,000 2. You paid $7,800 total 3. You already got tax benefit on $5,000 via DCFSA 4. Remaining expenses: $2,800 5. Since $2,800 is less than the $3,000 max for one child, you can use the full $2,800 for calculating your credit The credit percentage depends on your income, but even at the minimum 20% rate, that would be a $560 credit!

Late to the party but just wanted to say THANK YOU to everyone who contributed to this thread! I've been filing my taxes wrong for the past 2 years because my tax guy didn't understand how DCFSA and the Child Care Credit interact. We have twins and spend about $14k on childcare annually. We max out our DCFSA at $5k, but I had no idea we could claim the additional expenses (up to $6k total for two kids) for the Care Credit. Just amended my 2023 return and will be getting back over $1,200! This is why I love reddit - learn something new every day that actually saves real money. Checking out that taxr.ai thing too, sounds like it might be useful for some other questions I have.

Great question Andre! You're mostly right but there's actually a bit more nuance here that could benefit you. With one child, the Child and Dependent Care Credit allows up to $3,000 in qualifying expenses, while your DCFSA maxes out at $5,000. Since you contributed the full $5,000 to your DCFSA, you've actually exceeded the $3,000 credit limit already. However, here's where it gets interesting - if your total childcare expenses were $7,800 and you used $5,000 through DCFSA, you have $2,800 in remaining expenses. Since this is under the $3,000 limit for one child, you could potentially claim a credit on that $2,800! The credit percentage ranges from 20-35% based on your AGI, so even at the minimum rate you'd be looking at a $560 credit ($2,800 × 20%). Not a huge amount but definitely worth claiming if you qualify income-wise. Just make sure when you're entering this into TurboTax that you're not double-counting the expenses you already got the tax benefit from through your DCFSA. The software should guide you through this, but it's good to understand the mechanics behind it!