I've paid myself modestly this year but was working fulltime. I paid a nanny and want to benefit from the child care credit but TurboTax is saying I do not have earned income.
Did you indicate that you actively participate in the running of the farm? For Schedule K-1, this is often called "material participation." If you're not actively participating, the income is considered passive and doesn't qualify for the Child and Dependent Care Credit.
Is the business a Partnership? If so, is there a positive amount in box 14?
Or is the business an S-corporation? If so, did the corporation give you a W-2 and did you enter that W-2?
Yes, the business is a partnership and yes there is an amount in box 14 and it is positive. I also indicated that I actively participated in the business. I've got the worn dry hands and bad back to prove it, haha (jk).
But why would TurboTax not accept this info? The code is B for box 14, is that the problem?
Hi, thanks for your reply. Yes I did indicate I actively participated in the business. And still was not allowed the credit.
@erin-lynn-mcintosh wrote:The code is B for box 14, is that the problem?
Yes. There isn't also a code "A"?
Did the business have a profit in Box 1? Or Guaranteed Payments in Box 4? Or if box 1 is a loss, is Box 4 larger than the loss in Box 1?
1065 instructions for 14B self-employment under the farm optional method on Schedule SE (Form 1040), Part II.
However, thus may be inconsistent with the rules for the FOM.
see the instructions for Form 1040-SE
https://www.irs.gov/pub/irs-pdf/i1040sse.pdf