I reported $24,000 in dependent care expenses for my 3 kids. After completing the wizard it gives me a credit total of $239.00. Shouldn't it be 20% of $6,000? (=$1200)?

[itaynachum]

Married filed jointly, 3 kids.
Total W-2 income $274k.

Total dependent care eligible expenses (day care + day camp) = $24,604
Paid through employer dependent care FSA - $4,807, which leaves $19,807 of eligible expenses for the dependent care tax credit.

So my tax credit should be 20% of the maximum of $6,000 eligible expenses = $1,200.

TruboTax is determining that I'm eligible for a $239 credit in that category.

What am I missing here or is TurboTax wrong?

[xmasbaby0]

Remember that the child care credit for 2022 is non- refundable.  It can only reduce your tax liability.  It is not added to your refund.

[itaynachum]

Thank you, but unless I'm misunderstanding what that means -- that's not the case here.

I still have about 40k in tax liability. I withheld about 45k total this year, and I'm looking at a 5k refund according to TurboTax after I put in all my info.

With that in mind, my tax credit for dependent care should be $1,200, shouldn't it?

[xmasbaby0]

To call TurboTax customer support

https://ttlc.intuit.com/questions/1899263-what-is-the-turbotax-phone-number

Customer support is available from 5 a.m. to 9 p.m. Pacific time daily

[itaynachum]

Called them. They couldn't speak to that, just suggested that I upgrade to the tax advice tier and then I can chat with a tax specialist, that's not helpful as I'm not looking for tax advise, just to understand if they have a bug in the software and it got calculated wrong.

[CatinaT1 · Accepted solution]

You only get to take tax benefit on a total of $6000. Since you received a tax benefit on $4807 already through your employer FSA, that leaves $1193 to use for the credit. 

$239 would be 20% of your eligible expense.

[GeorgeM777]

To follow-up on the comments from @xmasbaby0, the dependent care credit offsets the tax due.  Thus, if your credit was $239, and your withholding was $40,000, your total tax liability must have been $40,239.  

@itaynachum

[itaynachum]

Thank you! That at least explains how we got the $239 number.

I guess where I was wrong is that I thought you could double-dip on both FSA and DC tax credit provided that you have enough expenses to cover both. I gather that's not the case and in any case the limit is $6,000.

Much appreciated everyone!