Child Care Tax Credit

[Phoenix100697]

Why is Turbo Tax saying "Because you entered $6,000 or less of earned income for both (me and my spouse), we need to know if either of you were a full time student or disabled, in order to calculate the maximum credit? Our income is much higher than that, and we both earned. As it is, I answered no to both questions (not students, not disabled). The credit calculating is over $600 less than was calculated last year. What is happening?

[DavidS127]

The definition of earned income in IRS Publication 972 includes Taxable earned income and nontaxable combat pay.  Calculate your earned income (not total income) and compare that to the $6,000 amount reported by TurboTax.  For most people, earned income is from their W-2 job or their self-employment income.

[Phoenix100697]

Thanks, I've looked at our income as recorded in Turbo Tax and I think there is a software issue in regards to this topic - based on other topics I found searching in this community area. Do you know how/when I can find out if TurboTax software will be updated/corrected? Is there any work-around? What is happening (I think) is that it is not registering my and my spouse's income correctly in the Child Care and Dependent Credit area, despite it showing accurate numbers for each of us in the Income area. 

[DavidS127]

Your earned income is tabulated on an "Earned Inc Wks" form, and the Form 2441 for your Child and Dependent Care Credit picks up the earned income from there.

If after you sign out and sign back in you still have the issue, you could try to delete the Form 2441 from your return, and see if picks up the correct earned income when you re-enter your Child and Dependent Care information.  If it does not, you could try the same thing with the Earned Inc Wks.  

Here's how to Delete a Form in TurboTax Online: 

1. Open or continue your return in TurboTax.
2. In the left menu, select Tax Tools and then Tools.
3. In the pop-up window Tool Center, choose Delete a form.
4. Select Delete next to the form/schedule/worksheet in the list you want to delete and follow the instructions.

Click here for the full article on deleting a form in TurboTax.

If you are using the TurboTax Download/CD version, you click "Forms" (top right) and once in Forms mode you find the forms in the list in the left pane, and delete them.  Of course, if you are using TurboTax Download/CD, you can take a look at the forms before you delete them, and may be able to resolve the issue.

[4brian780]

I had the same problem.  But it's not just the credit that's missing, but if you made any pretax child care contributions, Turbo Tax will ADD that to your income and you WILL BE TAXED on that contribution. Major software issue that many people may not notice.  I was able to workaround this issue by doing the following:

1. On the same screen that give you that message about the $6000, instead of checking "none of the above" for both, check "disabled" for you spouse.

2. On the next screen, choose for all twelve months.

3. Continue with next screen to choose "no" to working while disabled.

4. Now go hit the back button a couple of times to get back to the first screen and choose "none of the above" for both. (the bogus message of $6000 is still there)

5. Now start entering the data for each child, one at a time.  

I spent well over an hour with Turbo Tax on this issue.  They saw the problem but at first thought I entered something wrong.  Not the case.  We went through the process multiple times, sharing screens.  Then, since nothing they suggested worked, I tried this "disabled" trick out of desperation and it worked.  They saw it work too so I would think a software fix is on the way. 

[NCperson]

it's a known bug....hopefully gets fixed with the next update. 

[CKJDuty]

This is our issue as well. We have carefully checked, removed and re-entered W-2 information for both of us. Showing over 6K for each parent yet the download is saying we do not have over 6K in earned income and asking whether we were disabled/student in order to proceed with childcare credit. We are waiting on a fix from TurboTax. With this many people commenting I would have expected a fix by now or instructions from one of the Experts acknowledging issue and timeline for fix. Very frustrating!

[BillM223]

I'm going to need your help to get more information. Please send me a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:

***Online Product***

1. Sign into your online account.
2. Locate the Tax Tools on the left hand side of the screen.
3. A Drop down will appear. Click on Share my file with agent.
4. This will generate a message that a diagnostic copy will be created. Click on OK, the tax file gets sanitized and transmitted to us.
5. Please provide the Token Number that was generated onto a response to this thread.

***Desktop Product***

1. Click into your return.
2. Click Online and select "Send Tax File to Agent".
3. This will generate a message that a diagnostic copy will be created. Click on OK, the tax file gets sanitized and transmitted to us.
4. Please provide the Token Number that was generated onto a response to this thread.

[BillM223 · Accepted solution]

NOTE:

It appears that this may be a display issue only with the desktop product.

That is, you see the following screen with its error message:

However, you should try to click "None of the Above" for both spouses (if true) and just continue. It appears that the subsequent calculations are correct.

Please try this and check the results.

[CKJDuty]

YES! That helped. The wording is what's confusing and your instructions and screenshot helped me. Thank you so much! I've spent hours on the phone with agents getting no where. 

[4brian780]

It is more than a display problem in my case.  Turbo tax never presented a screen where I could enter how much was spent, so no credit was calculated.  Worse yet, the $5000 I paid in pretax contribution at my employer was ADDED to my earned income, and TT calculated that I owed tax on that amount.  That was confusing because it was entered correctly on the W2.  I wonder how many people already filed and didn't catch this.  Anyway, the steps I took (earlier post) proved to be a successful workaround.  The earned income is now $5000 less and I have a child care credit.

[NCperson]

it is more than a display issue; I was able to replicate the bug in the Desktop version 

[josef104]

I have the same issue. After I enter the expense, TT shows the amount as $0.

Anyone got any updates from TT on this?

[DMarkM1]

Trying to narrow down the issue a bit.  What version of TurboTax are in?  Did you try the workaround stated by rBrian780 above.  It has shown to work.  

[jgualan]

I have the same issue the expense shows 0