Does Virginia have different limits for the 2021 Child Care deduction? I think TT deducted too much on my state return

[crunchyfrog1]

For 2021, you can deduct up to $8000 for child care for one child on your federal return, but everything I see says that the 2021 limit for Virginia remains $3000 for one child. TurboTax deducted the amount from my Federal Return Form 2441 line 3 which was nearly $6000. Is that an error?

[AmyC · Accepted solution]

Yes, new limits so this is correct. VA DOR  deductions says: 

Other Deductions

Child and Dependent Care Expenses

You may claim this deduction on your Virginia return only if you were eligible to claim a credit for child and dependent care expenses on your federal return. Enter the amount on which the federal credit for child and dependent care is based. (This is the amount on federal Form 2441 that is multiplied by the decimal amount - up to $3,000 for one dependent and $6,000 for 2 or more.). Do not enter the federal credit amount. 

[crunchyfrog1]

Yup, TurboTax is definitely wrong on this one. I confirmed with the Virginia Dept of Taxation. I tried to report it as a bug to TurboTax, but I don't think I was taken very seriously. Maybe they'll listen to the State of Virginia if they won't listen to me. 

[lprior]

The instructions for the Virginia form 760 for 2021 state:

Child and Dependent Care Expenses - Enter the amount on which the federal credit for child and dependent care is based. This is the amount on federal Form 2441 that is multiplied by the decimal amount - up to $8,000 for one dependent and $16,000 for two or more. DO NOT ENTER THE FEDERAL CREDIT AMOUNT. Note revised amounts for the 2021 federal Form 2441. Legislation enacted by the 2022 General Assembly allows Virginia to conform to these federal changes.

[lprior]

I think Turbo tax is correct....the change was part of conforming to 12/31/21

The Virginia State instructions for form 760 for 2021 state:

Child and Dependent Care Expenses - Enter the amount on which the federal credit for child and dependent care is based. This is the amount on federal Form 2441 that is multiplied by the decimal amount - up to $8,000 for one dependent and $16,000 for two or more. DO NOT ENTER THE FEDERAL CREDIT AMOUNT. Note revised amounts for the 2021 federal Form 2441. Legislation enacted by the 2022 General Assembly allows Virginia to conform to these federal changes.