I think i said I was unemployed somewhere earlier, but I had a startup that couldn't get customers.
Profits from Schedule C are considered earned income for purposes of the credit. A net loss from self-employment reduces earned income. Here are the the requirements for the Dependent Care Credit -
This confirmed my understanding. In the software, the 2260 worksheet shows a correct earned income. However, when asked about child care tax credit, when marking that neither of us were full time students or needing assistance ourselves, the software says I am not eligible.
If you have a 6,000 Loss on schedule C you do not have any earned income. You both need earned income to get the Child Care Credit. Earned income is only W2 wages or a Net Profit on Schedule C.
Thank you. I see https://www.irs.gov/taxtopics/tc602 states both spouses must have positive earned income