I've seen community answers suggesting that the Dependent Care Credit is not refundable, and will only reduce the tax liability to zero. But that seems to contradict the IRS statements in the link above. See "Claiming the Credit: Q10" in linked webpage above.
Hi @MayaD I can confirm we have answered Yes for both Married filing jointly, as well as the principal place of residence being in the US.
But I think I have figured this out. I removed the Dependent care credit and compared the refund summary. And the difference is that the system was not counting the Dependent Care Credit as a line item under credits. Rather it appears to have applied the credit as a reduction to our overall tax liability, not as a separate line item so there is no note of it being included in the summary. But I know it was added because the reduction amount matches the amount of the credit from the Deductions & Credits form.
This credit is hard to identify in the refund summary unless you do a before and after comparison when adding this credit. Easy to miss.
But I can confirm it is being counted, just not where I expected to find it.
Thanks!
Is your filing status Married Filing Separate?
Per IRS
If you are married, you must file a joint return to claim the credit. irs.gov
Thank you @MayaD for the reply.
Yes, we are married and filing as "Married Filing Jointly".
I can see the credit in the "Deductions&Credits" section, but it is absent from the refund summary. Am I right to assume that the TurboTax system is treating this credit as "non-refundable"?
Appreciate the assist. Thanks!
Please confirm that you answered Yes to the question "Did you or your spouse have a principal place of residence in the U.S for more than half of 2021?" in the Child and Dependent Care Credit section.
Confirming that we did answer "Yes" to the question: "Did you or your spouse have a principal place of residence in the U.S for more than half of 2021?"
Thanks.
Hi @MayaD I can confirm we have answered Yes for both Married filing jointly, as well as the principal place of residence being in the US.
But I think I have figured this out. I removed the Dependent care credit and compared the refund summary. And the difference is that the system was not counting the Dependent Care Credit as a line item under credits. Rather it appears to have applied the credit as a reduction to our overall tax liability, not as a separate line item so there is no note of it being included in the summary. But I know it was added because the reduction amount matches the amount of the credit from the Deductions & Credits form.
This credit is hard to identify in the refund summary unless you do a before and after comparison when adding this credit. Easy to miss.
But I can confirm it is being counted, just not where I expected to find it.
Thanks!