Child and dependent care tax credit

[psshah_9062]

Hello,

Since we are married filing jointly, we understand both spouse should have earned income in order for eligible to get the child and dependent care tax credit.

After having kids my spouse finally started to look for work, but unfortunately she has not been able to secured any income for 2023.

Both of my kids go to preschool.

Is there any way we can get the child and dependent care tax credit for the tuition we paid for their preschool by showing my spouse is looking for work and not having earned income for both spouse?

P.S. I do have earned income through my w2 employer.

Thank you for any advice!!

[SharonD007]

No. Since your spouse didn't have earned income, you don't qualify for the Child and Dependent Care Credit.  You both must meet all of the criteria to be eligible for the child and dependent credit.

• You (and your spouse, if filing jointly) must have earned income.
  • The earned income requirement for one spouse is waived if they were a full-time student or disabled (if they lived with the other spouse for more than 6 months in 2023)
  • You paid caregiving expenses so that you (and your spouse, if filing jointly) could work or look for work
  • The work/look-for work requirement for one spouse is waived if they were a full-time student or disabled (if they lived with the other spouse for more than 6 months in 2023)
• You paid a caregiver to care for a Qualifying Person. The caregiver can't be:
  • Your spouse
  • Your dependent
  • Your child if they were under 19 on the last day of 2023, even if not your dependent
  • The parent of the Qualifying Person, if the Qualifying Person is your child under the age of 13 during 2023
• Your filing status isn't Married Filing Separately (except under certain circumstances)
• You need to include the provider's name, address, and  SSN, ITIN, or EIN on your return.

For additional information, please review the TurboTax articles What is the Child and Dependent Care Credit? The Ins and Outs of the Child and Dependent Care Credit and Filing Tax Form 2441: Child and Dependent Care Expenses.

You can check with your employer to find out if they offer a Flexible Spending Arrangement (FSA) for dependent care expenses. When you contribute to a dependent care FSA, the contributions are paid with pre-tax income, so you get a tax break because you have less taxable income.

Refer to the TurboTax article What is a Flexible Spending Arrangement (FSA)? for more information.

[psshah_9062]

Thank you @SharonD007 ! Appreciate your prompt response.

Will the same rules applicable of earned income of both spouse when married filing jointly when it comes to Flexible Spending Account (FSA) to pay for the tuition for the kids' preschool? 

[AmyC]

Yes, the FSA can only be claimed under the same rules, otherwise, it is taxable income.

You can use the Dependent Care FSA to pay for the day care of:

• Your dependent children under the age of 13.
• Dependents of any age who are incapable of self-care, live with you at least eight hours a day, and are claimed as dependents on your income-tax return.

Eligible day care must:

• Be provided while you (and your spouse, if you are married) work, look for work, or attend school full-time.
• Be provided in your home by an eligible provider or at a licensed facility. You will not be reimbursed for residential or "sleep-away" care, nursing-home care, or for babysitting when you are not at work.
• Not be provided by your spouse, a child of yours under age 19, or any dependent you claim as an exemption on your federal income tax.

From Publication 503 (2023), Child and Dependent Care:

Work also includes actively looking for work. However, if you don't find a job and have no earned income for the year, you can't take this credit. See You Must Have Earned Income, earlier.

Rule for student-spouse or spouse not able to care for self.

Your spouse is treated as having earned income for any month that he or she is:

A full-time student, or

Physically or mentally not able to care for themselves. (Your spouse must also live with you for more than half the year.)

[psshah_9062]

Thank you @AmyC !