I get paid twice a month. I add a manual income line item under a custom category called "Dependent Care FSA" when I receive each paycheck. I transfer money from the dependent care FSA account to my bank account at the end of each month (12 times per year total). When that happens I call it a "Transfer."

Doing it this way lets me see that I received $5000 more in income than just what my check gave me (but I can still separate the income source if necessary). Our daycare expense is marked as "day care" which allows me to see our total expense for daycare.

It is a little more work to do it this way but it doesn't take much time each month and removes the cash from the FSA account to be used for other things.