Why am I unable to file for the Child & Child Care Tax Credit for daycare expenses this year? The only difference is I was able to file for a low income tax credit.

[nicoledelane]

The only difference is I was able to file for a Low Income Tax credit since I worked for a short amount of time in 2016 (which again, is the only difference). Does this effect the Child Credit of 1k per child and the child care expense credits?

I am slightly confused on why I was unable to obtain these child credits through turbo tax this year. This is the only year it has been an issue.

Can someone please advise?

[AndreaG · Accepted solution]

No. Claiming the earned income credit does NOT affect your ability to qualify for the child tax credit and the child and dependent care expense credit. Each of these credits has it's own set of requirements that have to be met. Additionally the child tax credit and the child and dependent care expense credit are based on your tax liability which is calculated on taxable income. The earned income credit is based on a comparison of your adjusted gross income and earned income, along with other information such as whether you are qualifying with a child. 

With the child tax credit, you can qualify for a credit of up to $1000 for each child that qualifies you for the credit. However, you cant get a credit that is larger than your tax liability. Additionally, if you have other nonrefundable credits that you are claiming, then together they cant total more than your tax liability. A nonrefundable credit is a credit that offsets your tax liability.

When you are unable to get the full benefit of the child tax credit, you can qualify for the additional child tax credit if you have earned income that is in excess of $3000 and you meet all the requirements. Please refer to the following FAQ to determine if you meet the requirements for the child tax credit. https://ttlc.intuit.com/replies/4862549 

[nicoledelane]

Thank you for the clarification. This must be something turbo tax automatically calculates because I had no other options to change anything.

[AndreaG]

All the calculations are generally done behind the scenes. If you are able to go in and view your federal form 1040, that will tell you alot. You can look at your tax liability on line 44. Line 7 will show W-2 income. Line 12 will show self employment income. These two line items are your earned income for earned income credit and the child and dependent care expense credit. Adjusted gross income is on line 37.