Can I get the child dependent care credit if I paid $6078 in childcare but only had $4500 deducted by my employer throughout the year?

[Cynthiad66]

It depends on the number of qualifying dependents on the tax return.  The Child and Dependent Care Credit allows up to $3,000 if you had one qualifying person, or $6,000 if you had two or more qualifying persons.

Based on the information provided, assuming you have two children,  you have $1,500.00 in unreimbursed expenses to use in computing the credit.

For 2022, the credit for child and dependent care expenses is nonrefundable and you may claim the credit on qualifying employment-related expenses of up to $3,000 if you had one qualifying person, or $6,000 if you had two or more qualifying persons.

Publication 503:  Child and Dependent Credit



 [Edited 1/26/23|1:41pm PST] 

[alex-kantner]

I thought that the limit was $5000 for a dependent care FSA? I only did $4500 to stay under it but then paid $6078 in childcare costs.

[Opus 17]

The maximum expenses eligible for the credit are $3000 for one qualifying child and $6000 for 2 or more qualifying children.  If you had a $4500 FSA and paid more than $6000 for care, you will have $1500 of expenses that will be applied to the credit.

Turbotax will figure this all out for you. Make sure to enter all your qualifying expenses, because the IRS requires all your expenses to be entered along with your FSA amount, so your expenses can be reconciled to the FSA and any excess applied to the credit.  If you only entered $1500 or $1578 as your expenses (because the $4500 was paid from the FSA) all kinds of bad things will happen.  Enter your total expenses and let Turbotax do the math. 

[alex-kantner]

I have all of it entered, but TurboTax is telling me I don't qualify. Should I upgrade to talk to someone?

[Opus 17]

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@alex-kantner wrote:

I have all of it entered, but TurboTax is telling me I don't qualify. Should I upgrade to talk to someone?

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Does the program give a reason?  You must work to use the credit or FSA.  If you are married filing jointly, your spouse must also work or be a full time student.  (If your spouse is unemployed and looking for work, the expenses are "qualified", but the dollar value of the credit is limited to the income of the lower-earning spouse.).  If you are married filing separately, the maximum FSA amount is $2500 (the rest is added back to your taxable income) and the credit on top is disallowed by law.  If you haven't enter your or your spouse's income yet because you don't have the W-2, you won't qualify for now but the credit will be recalculated when you enter your income.

You also need to make sure the dependents are actually listed as dependents (lived in your home more than half the year).  If the children live more than half the year with their other parent, you can't claim the credit or use the FSA even if you pay the expenses.  If your dependents did live with you, you can go back and double check your answers in the dependent interview. 

If you are using Turbotax online, the free telephone help is supposed to just cover program problems, and they want you to upgrade to Live for actual tax advice.  However, if you can't figure out why you don't qualify, I would start by calling the free support and ask them to give you more details on why you don't qualify. 

[alex-kantner]

Thank you! I'm filing as single/head of household so it's sounding like it should be working--but it's not giving me a reason it's not. I'll double check all the info you sent then call if it still isn't showing up. I checked on another website and it was showing my return higher there, so I think they were giving me it there. 

[rjs]

Have you entered all of your income? As Opus 17 said, you have to have worked in order to qualify for the credit. TurboTax doesn't know that you worked unless you enter income from working, which would be your W-2.