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katatauck
New Member

It says I cannot deduct my childcare expenses because my husband hasn't had "earned income"

 
2 Replies
SweetieJean
Level 15

It says I cannot deduct my childcare expenses because my husband hasn't had "earned income"

Does he have wages, or a profit (not just income) from self-employment?  Note that he is required to claim all of his SE expenses.
WillK
Level 9

It says I cannot deduct my childcare expenses because my husband hasn't had "earned income"

If your husband was self-employed and showed a loss in his business then he would not have any earned income. Per the IRS: " To be able to claim the credit for child and dependent care expenses, you must file Form 1040, Form 1040A, or Form 1040NR, not Form 1040EZ or Form 1040NR-EZ, and meet all the following tests.

1.   The care must be for one or more qualifying persons who are identified on Form 2441. (See Qualifying Person Test.)

2.   You (and your spouse if filing jointly) must have earned income during the year. (However, see Rule for student-spouse or spouse not able to care for self under Earned Income Test, later.)

3.   You must pay child and dependent care expenses so you (and your spouse if filing jointly) can work or look for work. (See Work-Related Expense Test, later.)

4.   You must make payments for child and dependent care to someone you (and your spouse) cannot claim as a dependent. If you make payments to your child, he or she cannot be your dependent and must be age 19 or older by the end of the year. You cannot make payments to:

1.   Your spouse, or

2.   The parent of your qualifying person if your qualifying person is your child and under age 13.

See Payments to Relatives or Dependents under Work-Related Expense Test, later.

5.   Your filing status may be single, head of household, or qualifying widow(er) with dependent child. If you are married, you must file a joint return, unless an exception applies to you. See Joint Return Test, later.

6.   You must identify the care provider on your tax return. (See Provider Identification Test, later.)

7.   If you exclude or deduct dependent care benefits provided by a dependent care benefit plan, the total amount you exclude or deduct must be less than the dollar limit for qualifying expenses (generally, $3,000 if one qualifying person was cared for or $6,000 if two or more qualifying persons were cared for). (If two or more qualifying persons were cared for, the amount you exclude or deduct will always be less than the dollar limit, since the total amount you can exclude or deduct is limited to $5,000. See Reduced Dollar Limitunder How To Figure the Credit, later.)

Since you have a business loss, your are not able to show earned income (business profit). With that scenario, you would not be able to claim dependent care. 

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