Will not let me enter dependent care

[thom9969]

When I get to "entering dependent care credit" turbotax asks me if either my spouse or I are a student, or disabled, then simply goes back to the tax break menu with a zero on the line for 2021.  We both earned income, and should qualify

[rjs]

Have you entered all of your W-2s? You cannot enter dependent care expenses until you have entered the W-2s for both of you.

Check that you selected the correct person that each W-2 belongs to. If you selected the same person for both W-2s, it looks like the other person has no earned income.

[ColeenD3 · Accepted solution]

Make sure that both W-2s are entered and that they are entered under the correct name. The IRS bases the credit on the income of the lowest-earning spouse.

If one of you is self-employed and had no profit, the credit will be based on $0.

[thom9969]

Thanks!  I found that I used my name for both W2's.  Fixed that, and went through!

[Jwcook]

I am having the same issue described above. In regards to income, my business is showing a loss for last year on schedule c, however I also have w2 income as, as does my wife. The loss on my schedule c is larger than my w2 income but less than our combined w2 income. Is the loss on schedule c negating my w2 income down to zero? 

[JulieS]

Yes, your Schedule C loss could make you ineligible for the Child and Dependent Care Credit. 

The IRS bases the credit on the income of the lowest-earning spouse. If your business loss is more than your wages on W2, your income would be $0. That would limit your credit to $0.

If your business loss is not greater than your wages, check your W2 forms.

As @ColleenD suggests above, check that your W-2s are entered and that they are entered under the correct name.

[Critter-3]

Take a look on the Sch C ... did you add assets that you can depreciate slower (or depreciate instead of using the expense option) to give you a less loss and/or a gain on the Sch C ?   This is one of the legal ways allowed to change the bottom line of the return.  

[mmcampbell04]

I am having this issue (unable to enter dependent care payment amount), and turbotax even keeps prompting me to go back and correct the entry (which shows as $0). There are 3 boxes you can check: child did not live with me from xx month to xx month (not checked), I paid for more than half my household expenses (checked) and the child lived with me for more than half the year (checked). Would any of those checked options make me ineligible? 

[AmyC]

No. All three boxes are fine, just different information is required. For what you checked, you simply need to meet the requirements. If you are married, you must both have earned income or attended school.

• Earned income or attended school. If you are married, you must both have earned income or attended school.
• child 12 and under unless disabled, 
• lived with you over 6 months, 
• you lived in US, Canada, or Mexico. 

Do you meet all of the qualifications? If so, double check your answers. If your employer contributed, there would be an entry on your w2, box 10.

You enter the amount paid on the screen with the daycare information.

@mmcampbell04

[Kenh20]

My daughter is filing married but separated.  She has two children and we can’t put her day care in.  He files his own taxes so I wouldn’t think she could put his w2 on her taxes.

[DianeW777]

No, you would not put his W-2 on her taxes if they are filing separately.  If they live together, it would seem to be more advantageous to file jointly.  However, if your daughter is filing separately, then she would open a new TurboTax account to file her separate return.  Both returns would require the social security number (SSN) of the other spouse.

Generally it's better to file jointly because the tax rate climbs more rapidly using married filing separately.

State tax laws can also dictate your required filing status and/or income required to be reported on each spouse's return.

The following link will get you started in the right direction based on your specific situation. Be sure to review any hyperlinks that might pertain to you.

• Is it better for a married couple to file jointly or separately?

Whatever the final decision you can use the link below to enter the self employment.  Be sure to use the business code 624410 so that TurboTax knows it's a daycare/childcare business.

• IRS Publication 587 (review the Daycare sections to be sure you see everything you can use)
• Home Office Deduction 
• How do I report income from self-employment?

@Kenh20 

[Edited: 02/05/2024 | 6:25 AM PST]

[xmasbaby0]

@Kenh20 If your daughter files MFS she cannot get the childcare credit.   When you file MFS, you lose some child-related credits--including earned income credit and the childcare credit.  And you have a lower amount to get the child tax credit.