Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 2
posted Feb 18, 2022 10:42:55 PM

Turbotax says we are not eligible for Dependent Care Credit. Why not? (married filing jointly, AGI < 400k, with 1yo child, spent 20k for daycare)

0 3 1364
1 Best answer
Expert Alumni
Feb 19, 2022 6:21:54 AM

The amount of pre-tax dollars from your employer to pay for childcare cannot be used for the Child and Dependent Care Credit. This amount is reflected in Box 10 of your W-2s.

 

The credit is based on a maximum of $8,000 spent on childcare and is reduced for every dollar of childcare you paid using pre-tax income. Since your dependent care from your FSA exceeds $8,000, you cannot claim the credit.

3 Replies
Level 2
Feb 18, 2022 10:49:55 PM

Some more details:

Both parents have W-2 income > $20k;

we used 10k in dependent care FSA;

The child has lived with us all year.

The expenses are for 2 licensed daycares (we have EINs for both)

 

Expert Alumni
Feb 19, 2022 6:21:54 AM

The amount of pre-tax dollars from your employer to pay for childcare cannot be used for the Child and Dependent Care Credit. This amount is reflected in Box 10 of your W-2s.

 

The credit is based on a maximum of $8,000 spent on childcare and is reduced for every dollar of childcare you paid using pre-tax income. Since your dependent care from your FSA exceeds $8,000, you cannot claim the credit.

Level 2
Feb 19, 2022 9:38:06 AM

Oh I see... Now I get it.

Thank you so much for the clarification!