New York State via an audit denied my dependent care credit, even though I provided them proof of zelle payments to the babysitter, proof of account ownership it was paid from, and a statement from the babysitter along with her SSN; and I know for a fact the babysitter claimed this income.
I am not sure why I was denied yet, I am waiting on the letter from them. I do know I was denied, as my audit was closed and refund adjusted (by the care credit amount) and sent to me. I will fight this of course, since I provided exactly the documents they require from what I can tell for proof!
I have two questions
1. If NY ultimately rules I cannot receive the NYS credit does that mean I do not qualify for the federal credit as well, and I need to amend my return or are they separate?
2. How far can I fight this ridiculous state on this, is this something that could go to court or is it essentially NY said this and that is how it is?
