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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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Regarding dependent child care credit/expenses I have a flexible

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Regarding dependent child care credit/expenses: I have a flexible spending account (FSA) that I contributed $2500 to in pre-tax dollars for '08 & rec'd all of it back by filing claims for it. However, I spent a total of $4685 for the year. My multi-part question (hope that's OK) is: 1) When filing, is this reimbursement of my pre-tax dollars (the $2500) considered an "HSA distribution?" and 2) if I was home on maternity leave with our new baby (Sept-Dec) and dep care benes were primarily used for our other child can I "include (her, our new baby) without expenses?"   I noticed it increases my refund by $300 but not sure if it's OK. I'm using TaxAct online and it's one of the questions in the child care credit section. Finally, she was born in Sept, but the form is making me select 7 to 12 months as # XXXXX mos she resided with us in '08. Do I just put 12?   THANK YOU FOR YOUR REPLY!
Hello janalee,

Regarding the first part of your question: The $2,500 used from your FSA account is not the same as a Health Savings Account. It is not considered to be an HSA distribution. When you have an HSA account and receive a distribution, you will actually receive a form from the institution where you HSA account is held reporting the amount of that distribution. It is not the same as a flexible spending account.

Regarding the second part of your question, you cannot claim expenses for the newborn child unless you actually paid expenses for someone to provide for her care. If you were the caregiver for the newborn child, then you can only claim the child care credit for the one child who was actually receiving day care services.

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Thank you.

Customer: replied 8 years ago.
Great, thank you for clarifying that!   But what about the section where they're asking me how many months the newborn lived with me? (this was the last part of my orig question).

It won't let me continue without entering 7, 8, 9, 10, 11 or 12 months. She was born in Sept... so that's only 3.5 months. Form 8867 (which auto-filled by taxactonline), line 11 indicates that she lived with me more than 1/2 the year. And also on their "Dependent Worksheet" it says 12 months. Is this OK if she only lived (outside my belly, haha) for 3.5 months?

THANK YOU MERLO - you've been Great... more positive comments coming your way!
Hello again janalee,

For your newborn child, you will enter that the child lived with you for the entire year.

For purposes of determining whether or not a person is a qualifying person for purposes of the child care credit, a person who was born or who died in 2008 is treated as having lived with your for the entire year, as long as your home was their home for the entire time that they were alive.

Please refer to page 3 of the following IRS publication, under the paragraph titled "Birth or Death of Otherwise Qualifying Person"

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Thank you.

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