Child and Dependent Care Credit Not Showing in Federal Review

[TaxexpertIRL]

You seem like you don’t know what you are talking about.  I am not trying to be mean, but if you don’t know just say so.  Because, people are counting on their tax refund money.

[xmasbaby0]

@TaxexpertIRL You added to a thread that has had no activity since April of 2022 when people were asking about 2021 returns. 

 The child tax credit has changed drastically for 2022 tax returns.   In case you are not aware of the changes:

 if you did not work in 2022, you will not receive an income tax refund based on having dependent children.

The rules for getting the child tax credit on a 2021 tax return and now on a 2022 return are very different.  For 2021 you could get $3600 for a child under 6 or $3000 for a child between 6 and 17 even if you had no income/did not work.   That is NOT the way it will work for your 2022 tax return.  The “old” rules are back.   The maximum amount of the child tax credit is now $2000; the refundable “additional child tax credit” amount is $1500.   In order to get that credit, you have to have income from working.  The credit is calculated based on the amount you earned above $2500 multiplied by 15%, up to the full $1500.  If your child is older than 16 at the end of 2022, you do not get the CTC.  But you may still get the non-refundable $500 credit for other dependents instead.

https://ttlc.intuit.com/questions/1900923-what-is-the-child-tax-credit

https://www.irs.gov/help/ita/does-my-childdependent-qualify-for-the-child-tax-credit-or-the-credit-f...

And for the Earned Income Credit—-the rules are back to the “old” rules—

Those under 25 and over 65 without children are not eligible as they were uniquely in 2021.   And you cannot use your income from any earlier tax year to get the EIC for a 2022 return.  There is no “lookback” for 2022.  EIC for 2022 will be based on the income you earned by working in 2022.

https://ttlc.intuit.com/questions/1899157-what-are-the-qualifications-for-the-earned-income-credit-e...

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

Look at your 2022 Form 1040 to see the child-related credits you received

PREVIEW 1040

https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing

Child Tax Credit line 19

Credit for Other Dependents line 19

Earned Income Credit line 27

Additional Child Tax Credit line 28

[jjaden]

In reference to the dependent care credit for 2022 tax return will a parent need to be working and obtaining a w2 to get the credit or does self employed Schedule C apply. Im currently doing my taxes and its not applying the depended care credit when I worked but as self employed. 

[xmasbaby0]

@jjaden The childcare credit is available to W-2 employees or to those who are self-employed...BUT if you are self-employed you will not get the childcare credit if you show a loss.

[jjaden]

Thats so strange because its saying I don't qualify for the dependent care credit however I have a profit from my business. 

[xmasbaby0]

The credit is non-refundable.....it is not added to your refund.  It can only reduce your tax owed.  And ....what is your filing status?  If you are married filing separately you cannot get the childcare credit.   or...if you are not the custodial parent you cannot get the childcare credit.

You will not get the childcare credit until (unless) you enter income earned from working.   The credit does not work unless you enter your income first.   If you are filing a joint return you must show income for both spouses, or show that one or both of you was a student or disabled.   If you have self-employment income and show a loss you will not get the childcare credit.  You will not get the credit if you are filing married filing separately.  

If you have entered all of your income and you have entered your dependent(s) then work on the childcare credit by entering the Tax ID or Social Security number of your childcare provider and enter the amount you paid for the childcare.

One of the most common mistakes that messes up the childcare credit for people is listing all of the earned income under only one name on a joint return.  Make very sure that your incomes are listed under each of your names.  It’s pretty easy to check.  Go to the Income section, and click “update” on Wages and Salary.  That will take you to the W-2 Summary.  Do you see income listed under both of your names? 

 The person receiving the care had to be 12 or under or qualified as mentally or physically disabled. To claim the childcare credit you need to be filing as Head of Household or Married Filing Jointly. (NOT married filing separately)

 If your child was born in 2022 make sure you say the child lived with you all year. The credit is a percentage of your expenses based on your AGI (the higher the income, the lower the percentage)  You must provide the Social Security number for each child you are claiming, and the Social Security number or Tax ID for each care provider. 

In the case of divorced or never-married parents—only the custodial parent can use the childcare credit.

And remember that the childcare credit is a NON-refundable credit.  It can reduce your tax owed down to zero, but it is not added to your refund.

https://ttlc.intuit.com/questions/1900643-what-is-the-child-and-dependent-care-credit

[jjaden]

Im filing head of household single with 1 dependent child age (5) I have majority of my income in self employment and only a small percentage from a w2. When I get to the end it only says "it turns out you don't qualify for this credit"

I should still qualify for the credit. I worked on all my income first

We've determined you can't claim a dependent care credit. This could be because:

• You have no qualifying dependent care expenses, or you paid all your expenses with dependent care benefits.
• You have no earned income, or your earned income was excluded by the foreign earned income exclusion.
• You have one child and had dependent care benefits of $6,000 or more.
• You don’t owe any tax.

[xmasbaby0]

Do you have any tax due?   Is there an amount on line 37 of your Form 1040

PREVIEW 1040

https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing

[jjaden]

When I preview it doesn't state line 37. Would it be amount due?

[xmasbaby0]

if you have federal tax due it would be on line 37.   If that line is blank you do not owe tax.  You will not get the childcare credit if you do not owe any tax.