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When I take out my dependent Care Benefits, ($5,000 W-2, Box 10) my owed tax amount goes down. Why are my taxes increasing with the credit being input?

 
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1 Reply
HelenaC
New Member

When I take out my dependent Care Benefits, ($5,000 W-2, Box 10) my owed tax amount goes down. Why are my taxes increasing with the credit being input?

You need to enter a child that qualifies for the Child and Dependent Care Credit and the Daycare/childcare provider in that section of TurboTax. Don't look at the refund or amount due until you enter all your information in TurboTax. The refund/amount due is constantly changing. 

If you do not have a qualifying child or your child did not go to Daycare, but you had pre-tax monies allocated for Daycare on your W-2, the $5,000 is now being taxed.

The Child and Dependent Care Credit can reduce your tax bill if you paid for a dependent's care so that you could work or look for work.

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