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My wife has schedule C (correctly attributed to her name) and shows a profit above $6,000, however when doing the child care tax credit it says she makes less than $6000

It keeps asking if we were students or disabled and then says we do not qualify. We both have income over $6,000 reported
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1 Reply
SharonD007
Employee Tax Expert

My wife has schedule C (correctly attributed to her name) and shows a profit above $6,000, however when doing the child care tax credit it says she makes less than $6000

The Child and Dependent Care Tax Credit is a nonrefundable creditwhich means the credit can't reduce your tax liability if it’s already zero (line 24 of 1040).

 

You can view your tax summary in TurboTax to check if your tax liability is zero. 

  1. Select Tax Tools on the left side of the screen (you may need to click on Continue in the center first)
  2. Select Tools
  3. In the box that pops up, select View Tax Summary
  4. Check to see if there's a zero for Total Tax.

Ensure that you meet all the eligibility requirements for the Child and Dependent Care Credit to get the credit: 

  1. They must be your dependent (and are either under age 13 or are disabled)
  2. You must have earned income
  3. Your spouse (if filing jointly) also must have earned income, is a full-time student, or is disabled
  4. You must file Married Filing Jointly if married or meet the exception
  5. You must provide the caregiver's name, address, and identifying number (Social Security or tax ID number)
  6. You must owe income taxes.

Check to make sure that your wife's Schedule C shows a profit (sometimes expenses are more than the income).  If her business doesn't show a profit, then she won't show income.  Also, check to make sure W-2's are assigned to the correct taxpayer.

 

For additional information, review the TurboTax article The Ins and Outs of the Child and Dependent Care Tax Credit.

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