Thank you @xmasbaby0 and @SweetieJean for your replies. Apologies that I have made this confusing and thank you for bearing with me. You're correct in that I may have left out some details that I did not realize that they were important, hence I am asking here 😃
Therefore, to avoid further confusion, here are all of the details:
1) My mother-in-law came to my house to provide dependent care (child care) services to my 2 year old daughter for the following dates below, so that my wife and I am able to work at their respective full-time employment.
January 6-10, 2020 | $549.75 |
April 20-24, 2020 | $549.75 |
August 10-14, 2020 | $549.75 |
December 7-11, 2020 | $549.75 |
Total | $2,199.00 |
2) We had paid her in cash for the $2,199.00 amount.
3) We have withdrawn from my Dependent Care FSA account (using the pay me back feature) for this within WageWorks.
4) My mother-in-law has entered the $2,199.00 as HSH income in her tax return.
5) She is not a dependent on my tax return.
So on my tax return, that screen in TurboTax where it says "your friend or relative counts as a care provider as long as they are operating a business. " My mother-in-law is not operating a business, so therefore it makes me think I do not qualify for the Dependent Care Credit. That is the question I'm trying to get clarification on, since I do not see this mentioned in the IRS publications.
Hopefully the above details are clear and I did not miss any other important detail. Thanks again!
