Dependent Care Credit Question

S1993 · ‎January 17, 2023

My wife and I currently plan to file married filing jointly. From January and up until about halfway through May of last year she was a stay at home mom. From mid-May until the end of November she was a part-time college student while also looking for work. She finally landed her full time dream job in November and continues to do college part time as well. When I try to input the daycare costs for our two daughters between November to EOY it says we do not qualify for the credit because my wife didn't make enough money. Is this correct? I'm especially curious because she did spend more than half of the year looking for work as well.

xmasbaby0 · ‎January 17, 2023

The catch to "looking for work" to get the childcare credit is that you actually have to find a job and work at the job. So if she was a student and only earned a small amount in 2022 the credit is going to be small.

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

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Opus 17 · ‎January 17, 2023

For purposes of the credit, the program should assign your wife $250 or $500 of income for each month she was a full time student (depending if care was provided for one or two or more children). She is not assigned income for months she was a part-time student. And she gets credit for her actual income for the months in which she was working.

However, even though expenses paid during times of looking for work are considered "qualified expenses" for the credit, the actual amount of the credit is limited by her actual earnings or her assigned earnings.