If I paid in 2500 for childcare does that make my refund go up?

[noahsmom12162020]

I will receive paperwork from the preschool as well.

[Bsch4477]

Receiving child care credit would decrease your tax liability and so increase any refund. 

[xmasbaby0]

You will not get the childcare credit until (unless) you enter income earned from working.   The credit does not work unless you enter your income first.   If you are filing a joint return you must show income for both spouses, or show that one or both of you was a student or disabled.   If you have self-employment income and show a loss you will not get the childcare credit.  You will not get the credit if you are filing married filing separately.  

If you have entered all of your income and you have entered your dependent(s) then work on the childcare credit by entering the Tax ID or Social Security number of your childcare provider and enter the amount you paid for the childcare.

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? 

 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 2025 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. 

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

And remember that the childcare credit is a NON-refundable credit.  It can reduce your tax owed down to zero, but it is not added to your refund.

[rjs]

The child care credit will probably increase your refund. But the child care credit is a "nonrefundable" credit. That means that if other credits already reduce your tax to zero, the child care credit won't make any difference. In that situation you are already getting your maximum refund. A nonrefundable credit cannot decrease your tax to less than zero.

The only way to know for sure how much benefit you will get from the child care credit is to prepare your tax return. You certainly should enter the child care expense information. It can't hurt, and as I said, it will probably increase your refund.