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Level 2
October 15, 2023
Solved

Child and dependent care credit

  • October 15, 2023
  • 1 reply
  • 0 views

I receive a W-2.  My wife manages our rental properties and does not receive a W-2 or any other kind of form.  The properties are held in LLCs which are pass-throughs. The net to us is more than 6K.

 

When I try to use the child and dep care credit, TT for Mac asks about full-time student status and disability.  Neither of those apply so it says we are not eligible.

 

Should he income qualify as earned income?  If so, how do we show that?

 

 

 

 

    Best answer by Bsch4477

    If your income is rental income it is unearned income.  Managing the rental is part of producing that income, not an activity separate from it. 

    1 reply

    Level 15
    October 15, 2023

    Both of you have to show earned income to qualify for that credit. Otherwise the IRS assumes only one  of you is working so the other is available for child care. 

    jonasuclaAuthor
    Level 2
    October 15, 2023

    Thanks for your response, Bsch4477 !

     

     

    Does management of our rental property (owned via an LLC) qualify as self-employment and therefore earned income?

    Bsch4477Level 15Answer
    Level 15
    October 16, 2023

    If your income is rental income it is unearned income.  Managing the rental is part of producing that income, not an activity separate from it.