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diannabarton2017
New Member

I have earned income and it is reported in wages but am not able to claim child care credit. Why?

I have entered earned wages but cannot get child care credit because it says I must have earned wages.  I have over $26,000 in wages entered
1 Best answer

Accepted Solutions
xmasbaby0
Level 15

I have earned income and it is reported in wages but am not able to claim child care credit. Why?

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 2016 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.

*You can see the amount of the childcare credit you received on line 31 of your 1040A, or on line 49 of your 1040.

**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.**

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3 Replies
xmasbaby0
Level 15

I have earned income and it is reported in wages but am not able to claim child care credit. Why?

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 2016 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.

*You can see the amount of the childcare credit you received on line 31 of your 1040A, or on line 49 of your 1040.

**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.**
jtorres805
New Member

I have earned income and it is reported in wages but am not able to claim child care credit. Why?

I am having this issue - Turbo Tax is preventing me from qualifying for the Child Care Tax Credit. My wife is W-2'd and I have income from an S-Corp that I own and made a profit. One of the Chilcare prompts asked if I was a full-time student or incapable of self-care - essentially trying to get me to qualifying because it is assuming that I don't qualify otherwise. What should I do?

AmeliesUncle
Level 13

I have earned income and it is reported in wages but am not able to claim child care credit. Why?

@jtorres805  If the corporation had a profit and you took out money, you ALSO need to be on payroll with a W-2.   That is required.  And a W-2 from the corporation is "Earned Income".  Income from the S-corporation on the K-1 is NOT "Earned Income".

 

If the corporation did not put you on payroll and issue a W-2, you really should go to a tax professional.

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