Form 2441 Child and Dependent Care Expenses

[RaifH]

If TurboTax is preventing you from even entering the information about the camp, it is because both parents must have earned income. If both of you did have earned income, I would check to make sure the W-2s or other sources of earned income are properly in each spouse's name. 

If one spouse did not have earned income, you are still eligible for the child and dependent care credit for the months that spouse was a full-time student or physically unable to care for themself or for the child. Once you answer No to being a student or disabled, TurboTax determines you are not eligible for the credit. 

@nongkangma

[nongkangma]

Thanks for your reply!

Yes, Husband  W2, Wife self-employed, Schedule C. both have earned income.

How to deal with this issue?

I appreciate your help!

[Vanessa A]

Go back and be sure that the W2 income is listed for the husband and the self-employment income is listed for the wife.  Sometimes income will all be assigned to one person which will prevent you from claiming the credit. 

[hola9393]

I have exactly the same issue. It is a disappointment that Turbo Tax is part of the problem instead of being the solution. I have spent hours trying to figure this out, just to understand that there is no solution to this issue, and potentially exposing Turbo Tax customers to IRS audits or penalties. This is not acceptable.

[AmyC]

@hola9393 can you clarify your issue? There are several restrictions for claiming the credit.

See:

Instructions for Form 2441 (2021) | Internal Revenue Service

Form 2441 

[hola9393]

The issue is the one originally reported by user @edhondl in the first message of this threat.

[taxuser5678]

Yup, same issue here. I'm using Deluxe on Windows. I had Dependent Care FSA funds taken out of my paycheck in 2020. Did not use most of them because of COVID. For 2021, I did not have FSA funds taken out of my paycheck, but the 2020 funds rolled over, and I used them in 2021 to pay for a couple of day camps. Unfortunately, TurboTax will not let me go through Form 2441 Part III, so it's crediting me with the amount I paid in 2021 and not subtracting what rolled over from 2020. This seems like a pretty obvious flaw in TurboTax's calculations. I can correct it by overriding the relevant fields on Form 2441 but then I can't file electronically, which I paid extra for.

[myfriend09]

I ran across this thread while trying to research essentially the same issue. While I think TT is not doing something right, I think the Form 2441 is flawed to begin with. Here's my thread if anyone is interested: https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-dependent-care-credit-not-con...

what a cluster

[pbartoncpa]

Turbotax needs to correct the problem with Form 2441.  Same issue last year.  The form is not populating correctly and does not even allow step-by-step questions without checking the fulltime student or diabled box 

[SDun12]

If you're having to check full-time student or disabled boxes to fill this form out, and you're not one of those two, then you don't qualify for the credit.   That's not a TurboTax problem to fix.  That is a user entry problem - and you're filing your return incorrectly. @pbartoncpa   TurboTax works fine when there is earned income for both parties without checking either of those options. 

[hola9393]

The problem is not that TT has an issue, but the fact that they seem not willing to solve it (here we are in the tax filing deadline, and the desktop version of the program is still defective) even though people paid for a software presumably error-free that was supposed allow customers to file taxes electronically. Instead, users had to enter information in way that may trigger IRS audits and/or penalties to be able to overcome the software errors and file electronically. Given that TT did not solve this issue, the least they can do is to refund customers of the price paid for the software.

[hola9393]

The issue referred to in my post above is the one originally reported by user @edhondl in the first message of this threat.

[rf611]

I have the same problem. Here is my situation. My spouse has earned income that is reported in her name on Schedule C  (it is 1099-NEC income). I have W-2 income, but I also have a separate business reported on Schedule C that has incurred a loss. Note that my TOTAL earned income is greater than zero. However, it appears that TurboTax is not allowing me to enter Child and Dependent Care Expenses because it is only looking at my Schedule C loss and is ignoring my W-2 income when it comes to form 2441 processing. I can confirm that both my spouse and my incomes have been entered properly using our names and SSNs as appropriate.

It looks to me as if TurboTax needs to be updated to look at ALL sources of earned income for each individual, and not only at Schedule C income when it shows a loss. As it is now, I cannot figure out any way around this problem. I cannot even seem to edit form 2441 manually.

[AmyC]

Are you sure your sch C is showing as being in your name versus your spouse? Do you have the desktop version where you can go into the forms? You can datasource in forms mode and figure out the problem.

@rf611