Child and Dependent Care Credit Decreased from $1200 to $200. Why?

[kdw133]

We have 3 kids, over $6,000 in yearly child care costs, and income over $43,000.

In 2018 we filed using TurboTax.   It generated a Form 2441 and Schedule 3 that gave us a full $1200 child and dependent care credit.

For 2019, it is only showing a $200 credit, even though our situation has changed very little.

My understanding is it is a 20% credit of up to $6000 in care costs for 2+ children.  That should be $1200 like last year.  Why is it only showing $200 for this year?

[SusanY1 · Accepted solution]

The child and dependent care credit is a nonrefundable credit so it cannot reduce your tax below zero.  It is likely that after other credits were applied, only $200 of this credit was needed to bring your total tax bill down to $0.

You can check to be sure that is what is happening by viewing your Tax Summary.   Here is how to do that:

1. Log in to your tax return at TurboTax.com.
2. Click on Tax Tools on the left side of the screen (you may need to click on Continue in the center first).
3. Click on Tools.
4. In the box that pops up in the center, click on View Tax Summary.

If you see a 0 for Total Tax, then that is what has happened in your case.

[kdw133]

Susan,

Thanks for the response.  I followed the steps in your response and my total tax is not $0.  It's $1773, which is why I'd love to decrease it by another $1,000!  Any other ideas?

[ThomasM125]

Was there any child care provided by your employer, as listed in box 10 on your W-2? That may limit your credit.