Turbotax won't let me enter Child and Dependent Care Credit info. It gets caught in a loop sending me back to the beginning. Has anyone else experienced and resolved?

[TeresaM]

The Child and Dependent Care Credit is meant to support working families. To qualify, both spouses need to be working or one working and the other a student or disabled.  If all of the income is identified with one spouse it will not qualify for the credit.

For more information about the credit, please see this TurboTax Help article Child and Dependent Care Credit


 

[mattandashleyrisch]

I am also stuck in the loop.  I have tried all of the suggestions so far.  My wife and I are filing jointly she has W2 and I have K1 income from an LLC.  What else can I try I have gone through and wrapped up income.  I have also done the thing where you wrap up deductions and it askes if you want to go back and get the Dependent care Credit.  Or is K1 earnings not applicable to the Dependent Care Credit. 

[PattiF]

The income must be earned income to qualify for the child and dependent care credit.  If this income is on a K-1:

If the K-1 is from a partnership (Form 1065), it will count as earned income if there is an entry in box 14 with code A net earnings from self-employment. 

If this K-1 is from an S corporation (Form 1120S), then the corporation must have issued a W-2 as an employee for you to have earned income.

@mattandashleyrisch

[ilcail]

I'm having the same thing!

[BillM223]

Please describe the loop you are having. The first OP eventually discovered that he had accidentally assigned all the earned income to himself and none to his spouse. We could tell that when he listed the screens that he saw. 

So please tell us the screens you see and in what order.

@ilcail

[ilcail]

Alright, I'm partially at fault, I don't have a w-2 for my wife. She did start an event planning business this past year. We setup an s-corp but between expenses and low revenue, didn't file payroll. However... the IRS states: 

"You may be eligible to claim the child and dependent care credit if:

• You paid expenses for the care of a qualifying individual to enable you (and your spouse, if filing a joint return) to work or actively look for work."

that seems super wide open... "looking for work" is for sure what we would like to claim... but turbotax doesn't seem to care about this... just if there is a W-2 in her name or not?

[xmasbaby0]

"looking for work" does not help you unless she actually found a job  and earned some income or established a business that showed positive income.   If you cannot show income for both spouses on your tax return you will not be able to get the child care credit.

[ilcail]

thanks. but this still sounds like your words and not the words of the IRS. but it also seems like a losing battle

[ilcail]

[Married filing jointly] I have a w-2 for $110k and my wife has a w-2 for $6500 from our s-corp. I've entered around $7k in expenses for my 4 year old dependent and another $7k for my 3 year old dependent.  However, the Dependent Care Credit is being calculated out to $3,125... shouldn't it be 50% of $14k? 

[ilcail]

Hi, any help for why TT is calculating $3,125 credit for me even though we spent $14k?

[DawnC]

Are both dependents correctly listed as dependents qualifying you for the credit (are both dependents listed in the drop-down box)?   

Is there an amount in Box 10 on either of your W-2s?    If so, those dependent care benefits are already nontaxable and are deducted from your total expenses before calculating the credit.   

And do you have all of your care provider details entered?   If you do not provide EIN or SSN for your care providers (a different entry screen than the expense totals), those expenses are not counted in the credit.   

After checking those things, you can look at Form 2441 included in your return if you are still unclear about how the credit was calculated.    @ilcail

[jmtr08]

wanted to clarify the below statement: "If one of you is self-employed and showed a loss you will not be able to get the childcare credit." 

net loss deducts from earned income, earned income is anything that is from a W2 or self-employment combined. So for example, if I have 10K in earned incomed but a loss of 11K I cannot get the child care credit, however, if you reduce your net loss to 9,999 it will let you claim it. This is usually don't by reducing your self-employment deductions. I will also share this is sometimes not worth doing because you generally have to pay a lot in childcare just to get a good credit

[helpme15]

What if my spouse has income, but her business is overall a loss?

[VolvoGirl]

Sorry no.  She needs a Net Profit to count for the Child Care Credit.  

[Mdipoli000]

I'm having the same issue where it asks if we are a full time student or disabled and when I select that we are not either of those it bounces us back. Yet we meet all the requirements.