Yes, you still want to fill out this part even though you are not eligible for the child and dependent care credit.
The reason you are seeing hundreds added back to your refund is not that you are getting the credit. Instead, it is no longer considering the amount you spent on childcare as taxable income.
Prior to reporting any childcare expenses, it was adding the entire Box 10 amount from your W-2 to your taxable income. Now that you are reporting that $9,500 of the $10,500 was used for eligible expenses, only the remaining $1,000 is being added to your taxable income.
To verify this, you can preview your return once you fill in your child and dependent care information:
- Open or continue your return.
- Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
- With the Tax Tools menu open, you can then view your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu
- Scroll down until you see Form 1040 Line 1. Next to this line you will see "DCB" with the amount of taxable child care benefits. This is the amount of Box 10 that was not spent on child care in 2021.
- Form 1040 Line 31 will have credits that include your child and dependent care credit. If there is a number on this line, you can see what credits you are getting on Schedule 3. Schedule 3 Line 13g is for child and dependent care benefits. If that line is blank or Form 1040 Line 31 is blank, that means you are not getting the credit.
