Why does using a payflex account to pay for dependent care make you ineligible for Child Tax Credit? My work does not provide on site childcare. I use these pre-tax dollars to pay for child care for the whole year (includes summer camps not just after school care). However, every time I file taxes, it says I am not eligible even through I spend thousands on child care.
You'll need to sign in or create an account to connect with an expert.
You are already using untaxed money to pay for your childcare. You are not allowed to "double dip" and get a tax credit for the money spent on childcare.
Thank you for this. What if the cost of childcare is more than what is placed on Payflex. EX: State limits amount of money to place on Payflex and is $4,000, but the cost of childcare for the year is $8,000. Would you then qualify for the tax credit?
Hello @Loly12313 !
Child care is certainly expensive, and having a payflex account does help with that expense. However, the IRS limits the amount of child care paid to $3000 per child in order to be eligible for the Child and Dependent Care Credit. So if you are paying $10000 per child, you are limited to taking only $3000. If you're using funds from a DCB account to cover childcare or dependent care, you cannot claim the credit for those same expenses. Since DCBs offer up to $5000 of pretax dollars, this is still a better deal for you tax wise.
This link may be helpful to you:
No. You only get up to a $3000 child and dependent care credit per child--- and you are already getting more than that in money that has not been taxed. You cannot double dip.
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
infelise309
New Member
monajemi
New Member
amir-ghys
New Member
RoyRex
New Member
Kasiopaya94
New Member