Entering childcare expenses

[mrsfathead1]

Can't enter childcare expenses, keeps asking if we're disabled or students but we have earned income?

[xmasbaby0]

CHILD AND DEPENDENT CARE CREDIT

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? 

 A few other things—the childcare credit is not a refund.  It can reduce your taxes owed.  If you were self-employed, but showed a loss, you will not receive the credit. 

 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 2020 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.  You can claim a maximum of $6000 in expenses for 2 or more dependents.

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

You can see the amount of the childcare credit on your Form 1040

Child and Dependent Care Credit line 12     (comes from Schedule 3 Form 2441)

[ColeenD3]

How much earned income do you have? Do you both have earned income? You can only take a child care credit if you both work. 

From Form 2441: If filing jointly, figure your and your spouse's earned income separately. Enter your earned income on line 4 and your spouse's earned income on line 5

4 Enter your earned income. See instructions

5 If married filing jointly, enter your spouse’s earned income (if you or your spouse was a student or was disabled, see the instructions); all others, enter the amount from line 4 .

6 Enter the smallest of line 3, 4, or 5.

Form 2441