If it’s saying I don’t qualify for child care credit but I should what do I do

[daytonvega98]

This has been doing this for years and I just let it go but this year I need it

[xmasbaby0 · Accepted solution]

How old is your child?

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.

https://ttlc.intuit.com/turbotax-support/en-us/help-article/taxation/child-dependent-care-credit/L8h...

https://turbotax.intuit.com/tax-tips/family/the-ins-and-outs-of-the-child-and-dependent-care-tax-cre...

[hhttt]

I am having the same issue.  Both spouses have earned income.  Child is 3.  Money paid to provider.  Positive AGI and tax owed.  System STILL says we do not qualify for the credit?!?!?!!?

[Vanessa A]

Go back and double check to be sure that a W-2 is assigned to each of you.  Many times when you are told you do not qualify when you actually do it is because both W-2's are listed for one person so the other person does not have earned income per the system.

To do this select Income>>W-2's and then look to see if you each have your name by one. 

[hhttt]

Thanks.  Both had w-2 earnings, but one also had a farm loss.  That was the problem.  I reassigned the farm loss to the larger w-2 earner and it is now working.  Thanks.