Employee Dependent Care and Dependent Care Credit

[mel61780]

My husband received $1590 in dependent care benefits from work on his W2.  We spent a total of $1960 between summer camp and after school care in 2021. 

Should we still put the total $1960 amount in the section that says Dependent Care Credit? or because we received the $1590 we should not be putting information in this section of our taxes? 

Thanks!  

[Cynthiad66]

@mel61780 - NO.  You should reduce the amount you are claiming by the amount that was withheld from pay, $1,590.00,  The difference, $370.00, is allowable for computing the credit.  Use this link below for additional information:  Child and Dependent Care Credit

The American Rescue Plan brings significant changes to the amount and way that the child and dependent care tax credit can be claimed for 2021. The plan increases the amount of expense eligible for the credit, relaxes the credit reduction due to income levels, and also makes it fully refundable. This means that, unlike in other years, you can still get the credit even if you don’t owe taxes.

For tax year 2021 (the taxes you file in 2022):

• The amount of qualifying expenses increases from $3,000 to $8,000 for one qualifying person and from $6,000 to $16,000 for two or more qualifying individuals
• The percentage of qualifying expenses eligible for the credit increases from 35% to 50%
• The beginning of the reduction of the credit is increased from $15,000 to $125,000 of adjusted gross income (AGI).

Also for tax year 2021, the maximum amount that can be contributed to a dependent care flexible spending account and the amount of tax-free employer-provided dependent care benefits is increased from $5,000 to $10,500.

[mel61780]

Thank you so much for your response I really appreciate it! I just went back in it looks like it is already calculating that for me automatically below no? 

[mel61780]

@Cynthiad66 Thank you so much for your response I really appreciate it! I just went back in it looks like it is already calculating that for me automatically below no? 

[Vanessa A]

Yes, TurboTax does automatically calculate the amount.  You will need to enter the full amount in that section so your total expenses are greater than the $1,590.  If your total expenses entered are less than the total employer benefit you will not get the credit.  

[Critter-3]

@Cynthiad66  is WRONG ... you will enter the W-2 as issued AND  ALL of the child care you paid when asked and the PROGRAM will do the math for you automatically.   Do NOT reduce the amount you paid by the box 10 amount.