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Dependent Care FSA - 2019 Service Declared in Form 2441 of Tax Year 2019 - Paid in CY 2020


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While reviewing my tax form before filing, I realized the amount that was used to pay the 2019 service will be taxable (Box 29 of Form 2441). I never had this experience before since I always used up the $5000 DCFSA annual limit.

Scenario: *All amounts are not true amount.

  • DCFSA Plan Year 2020 - covers Sep 2019 to Dec 2020 (incl. grace period)
  • Contribution for Calendar Year 2020 - $3000 as shown on Box 10 of W2 (The other $2000 was contributed from Sep to Dec 2019 that paid CY 2019 service.)
  • Total Paid for Calendar Year 2020 Service - $2000 based on the statement by the daycare each yearend (My kid stopped going to daycare last March 2020 because of Covid.)
  • Year 2020 - Form 2441 - Box 29 - The $1000 is showing as taxable. This $1000 contributed in 2020 was actually reimbursed for 2019 Service Paid.

Please note that in Year 2019 - Form 2441, I declared $9000 as qualified expenses based on the statement by the daycare for that year. Part of that $9000 is the $1000 that is showing as taxable in my Year 2020 Form 2441. I did not get any credits as it was already over the $5000 DCFSA annual limit.

Question: Can I claim the $1000 as 2019 service paid in 2020 even though I declared it as qualified expense (part of the $9000) in Year 2019)?

Thank you and appreciate any insights.

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