I spent 11,000 on childcare but the Child and Dependent Care Credit only added up to $600, this number seems off like it should be at least 1,000

[ohlsenmichael-ya]

Even at the low end of 20% it would add up to $2,200

[AmyC]

Yes, 20% of $11,000 is $2,200 but you are being limited. Childcare is based on the max allowed vs amount spent. Do you have dependent care benefits from work that paid part of the amount? Did you have a spouse in school so the credit is limited by their $250/month student wage credit? Take a look at the form and see where the numbers are being limited. When you look at the form, you will see the limitation between amount paid and allowable amount.

See:

How do I preview my TurboTax Online return before filing?

What is the Child and Dependent Care Credit?

{Edited 1/26/2024| 4:55 PST]

[ohlsenmichael-ya]

I paid out of pocket on my own with no employer contribution and I am not married yet with my spouse claiming nothing for the child

[Critter-3]

The max credit you could get on the form 2441 for 2023 is 20% of $3000 or $6000 if you have more than 1 qualifying child... thus 3000 x 20% =  $600 ... the program is calculating the credit correctly ... review form 2441 carefully. 

[AmyC]

Critter-3 is correct about the form limitation. See it here.

[ohlsenmichael-ya]

So just to confirm, with one child having paid $11,473 in 2023 for daycare, the max I could get is $600 because the 20% is based on the $3,000 instead of the $11,473? Essentially anything you pay over $3,000 for the year gives you no additional tax benefits? If so, is there a way that my spouse could claim any of the remaining $8,473 that was paid for childcare last year?

[Critter-3 · Accepted solution]

So just to confirm, with one child having paid $11,473 in 2023 for daycare, the max I could get is $600 because the 20% is based on the $3,000 instead of the $11,473?      YES  

Essentially anything you pay over $3,000 for the year gives you no additional tax benefits?    CORRECT

If so, is there a way that my spouse could claim any of the remaining $8,473 that was paid for childcare last year?   NO ... only the person claiming the child can claim the credit on their return and if you are married filing separately neither of you  can get the form 2441 credit at all.  

[Opus 17]

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@ohlsenmichael-ya wrote:

So just to confirm, with one child having paid $11,473 in 2023 for daycare, the max I could get is $600 because the 20% is based on the $3,000 instead of the $11,473? Essentially anything you pay over $3,000 for the year gives you no additional tax benefits? If so, is there a way that my spouse could claim any of the remaining $8,473 that was paid for childcare last year?

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If you want to change the credit you need to talk to Congress.  If you have an FSA available at work, you can use up to $5000 toward the care of one or more children.  The FSA is a better tax break than the credit for almost all taxpayers.  Since the maximum expenses applied to the credit is reduced by any FSA amount, if you used an FSA of more than $3000, there would be no additional credit at all, but the FSA saves more than the credit. 

[xmasbaby0]

@ohlsenmichael-ya Above---you said you are not married.  Now you want your "spouse" to claim childcare credit?   What?

[ohlsenmichael-ya]

We are engaged but yes not my spouse yet. In other groups it is easier to say spouse but I realize the implications when talking about taxes

[xmasbaby0]

Yes----be careful when you are asking a tax question---do not throw around terms like "spouse" if you are not married because that starts us off with misinformation and can lead to incorrect replies.

[Opus 17]

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@ohlsenmichael-ya wrote:

We are engaged but yes not my spouse yet. In other groups it is easier to say spouse but I realize the implications when talking about taxes

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If you have one child, then only one person can claim them on their tax return.  If you live together, one person should claim the child and answer NO to all questions about custody.  Those questions apply to legal custody orders between parents who are separated or divorced, not to informal discussions between two parents living together.  The parent who will not claim the child should leave the child off their tax return entirely.

Since only one parent can claim the child, only one parent can get the child tax credit.  It will be $600 no matter who claims the child, unless one parent's adjusted gross income is less than $35,000.

In most cases, the parent who pays more than half the living expenses should claim the child, because that parent can file as head of household, which has a lower tax rate than single.  The other parent would file as single with no dependent.  If you split the household costs exactly 50/50, then no one can claim head of household, because no one pay more than half (exactly half is not more than half).  But one person only needs to pay $1 more than the other for it to be more than half.