Dependent care FSA vs. limited purpose FSA for taxes - which box on W-2?

Your employer definitely made a mistake on your W-2. There are two completely different types of FSAs that often get confused: A Dependent Care FSA (DCFSA) is specifically for childcare expenses for kids under 13 or disabled dependents, and these contributions go in Box 10 of your W-2. A Limited Purpose FSA (LPFSA) is for dental and vision expenses only when you also have an HSA. These contributions should NOT be reported in Box 10 at all! They're handled just like regular healthcare FSA contributions. You need to contact your employer's payroll or benefits department ASAP and ask them to issue a corrected W-2. This is relatively common and they should understand the issue immediately. They need to remove those contributions from Box 10 since they weren't for a Dependent Care FSA. Until you get the corrected W-2, I'd hold off on filing your taxes to avoid complications.

I had this EXACT problem last year and found taxr.ai (https://taxr.ai) super helpful for figuring it out. My employer also mixed up my Limited Purpose FSA with Dependent Care FSA on my W-2. I uploaded my benefits election docs and W-2 to taxr.ai and they quickly identified the mistake and explained what I needed to tell HR to fix it. The tool scans all your tax documents and finds these kinds of errors before you file. It explained exactly what boxes needed changing and even provided language I could use when contacting HR. Saved me from a potential audit situation!

Just wanted to update - I decided to try taxr.ai after seeing the recommendation here and wow, I'm impressed! It immediately identified that my Limited Purpose FSA contributions were incorrectly reported in Box 10, and even provided a sample email I could send to HR explaining the error. I sent the email yesterday, and my employer actually thanked me for catching it because apparently several other employees had the same issue! They're issuing corrected W-2s to everyone affected. The tool also flagged a couple other potential issues with my tax documents that I wouldn't have noticed. Definitely worth checking out if you have complicated tax situations!

If you're having trouble reaching HR to get this fixed, I highly recommend using Claimyr (https://claimyr.com). I had a similar W-2 issue last year and needed to talk to someone at the IRS about how to handle it when my employer was dragging their feet on the correction. I spent DAYS trying to get through to the IRS myself with no luck. Then I found Claimyr and they got me connected to an actual IRS representative in about 15 minutes! You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS rep walked me through exactly what to do if my employer wouldn't correct the W-2 in time, and explained Form 4852 which is a substitute for W-2 when there are errors. Totally saved my sanity during tax season!

I need to apologize and eat my words. After my skeptical comment, I was still desperate for help with my tax issue so I tried Claimyr anyway. I'm absolutely shocked - they actually got me through to an IRS agent in about 20 minutes! The IRS representative confirmed that Limited Purpose FSA contributions should NOT be in Box 10 of a W-2, and gave me specific instructions on what to do if my employer wouldn't correct it. They explained I could file Form 4852 (Substitute for W-2) along with documentation from my benefits enrollment showing it was a Limited Purpose FSA, not a Dependent Care FSA. Honestly, that 20-minute call saved me weeks of stress and potentially prevented an incorrect tax filing. I've been trying to reach the IRS for weeks with no success, so this was a game-changer.

Just to add some clarity - there are actually 3 different types of FSAs that get confused: 1. Healthcare FSA - for medical, dental, vision (can't have with HSA) 2. Limited Purpose FSA - ONLY for dental and vision (can have with HSA) 3. Dependent Care FSA - for childcare costs (totally separate) Your Limited Purpose FSA should be treated just like a regular Healthcare FSA for tax purposes. Nothing from #1 or #2 should ever show up in Box 10 of your W-2. Only Dependent Care FSA (#3) belongs there. If your employer won't fix it quickly, you can also reach out to the FSA administrator directly (like WageWorks, HealthEquity, etc.) - sometimes they can help push for a correction since they know exactly how it should be reported.

Has anyone had experience with what happens if you file with the incorrect W-2? My HR department is saying it could take 3-4 weeks to issue a corrected W-2, but I'm supposed to receive a large refund this year that I really need soon.

I just went through this exact situation last month! My employer made the same mistake - they put my Limited Purpose FSA contributions in Box 10 when they should have just been excluded from my taxable wages in Box 1. Here's what worked for me: I contacted both HR and our FSA administrator (in my case it was HealthEquity) at the same time. The FSA administrator actually reached out to HR on my behalf and helped expedite the correction since they deal with this type of reporting error frequently. While waiting for the corrected W-2, I also gathered all my benefit enrollment documents showing I specifically elected the Limited Purpose FSA, not the Dependent Care FSA. This documentation was super helpful when explaining the error to both HR and later to my tax preparer. One thing to note - make sure when you do get the corrected W-2 that they completely remove those contributions from Box 10. They shouldn't move them to another box, they should just disappear from the W-2 entirely since Limited Purpose FSA contributions are handled the same way as regular healthcare FSA contributions (just excluded from taxable wages). The whole process took about 10 days for me, which was much faster than the 3-4 weeks HR initially estimated. Good luck!