Why am I not qualifying for Child and Dependent Care Credit

[Huskers2025]

I've entered both spouses W-2s already. We spend ~$15,000 on daycare and contribute the max 5,000 to the dependent care account through my work. At the end it just tells me that I only have $5000 of eligible expenses and since I contributed $5000 of "dependent care benefits" that we have nothing that qualifies for the credit.

Oddly enough, if I take the information out of the system in the section, my refund goes down by almost $1000. Wondering if there's a software issue or if I'm missing something? Thank you!

[AmyC]

If the $5000 at work is a pre-tax account, as I suspect, then you have $5,000 eliminated. Look at your w2, box 10. Is the $5,000 there?  You stated that you have $15,000 of expenses. The deduction is $3,000 per child. You should list $6,000 for your deduction. 

This gives you $1,000 as an allowed expense for the credit to calculate.

See this example from Instructions for Form 2441:   For example, if you have two qualifying children, one age 3 and one age 11, and you incur $6,000 of qualifying work-related expenses for the 3-year-old and no qualifying work-related expenses for the 11-year-old, you can use $6,000 to figure the credit. In this situation, you should list $6,000 for the 3-year-old child and -0- for the 11-year-old child. The $6,000 limit would be used to compute your credit unless you have already excluded or deducted, in Part III, certain dependent care benefits paid to you (or on your behalf) by your employer.

Since your numbers change when you remove it, you must be missing a step somewhere. Be sure you are looking at Form 2441 and not just the 1040.  To print or view  your forms:

• In desktop, switch to Forms Mode. 
• For online:
  1. On the left side, select  Tax Tools
  2. Select Print center
  3. Select Print, save or preview this year's return
  4. If you have not paid, select pay now.

[Huskers2025]

Thank you very much for the response. After looking closer at the sheet, it appears since we have one child ($3,000 allowable expenses) and maxed out the dependent care account (it is pre-tax) at $5,000, then we don't qualify for the credit. 

It appears I made the incorrect assumption that if I had more expenses >$5,000 then those would be eligible for the credit, but that's not the case. Thanks again for the help.