Child and Dependent Care - Cannot Apply?
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Level 1

Child and Dependent Care - Cannot Apply?

My wife and I are both full-time workers and file jointly. Our son was born this year at the end of August. We started daycare in November as we went back to work. However, TurboTax does not give me the option to select my son (who I've added as a dependent) when attempting to apply for the Child and Dependent Care Tax Credit. Since he was born in 2020, by TurboTaxes own words, he is considered to have lived with us "all year", and given that we are both working, I do not see why I am apparently ineligible for this credit. Is this an error? Can someone explain what I need to do?

2 Replies
Level 15

Child and Dependent Care - Cannot Apply?

CHILD AND DEPENDENT CARE CREDIT

One of the most common mistakes that messes up the childcare credit for people is listing all of the earned income under only one name on a joint return.  Make very sure that your incomes are listed under each of your names.  It’s pretty easy to check.  Go to the Income section, and click “update” on Wages and Salary.  That will take you to the W-2 Summary.  Do you see income listed under both of your names?

 

A few other things—the childcare credit is not a refund.  It can reduce your taxes owed.  If you were self-employed, but showed a loss, you will not receive the credit.

 

The person receiving the care had to be 12 or under or qualified as mentally or physically disabled. To claim the childcare credit you need to be filing as Head of Household or Married Filing Jointly. (NOT married filing separately)

 

If your child was born in 2020 make sure you say the child lived with you all year. The credit is a percentage of your expenses based on your AGI (the higher the income, the lower the percentage)  You must provide the Social Security number for each child you are claiming, and the Social Security number or Tax ID for each care provider.  You can claim a maximum of $6000 in expenses for 2 or more dependents.

 

In the case of divorced or never-married parents—only the custodial parent can use the childcare credit.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Level 1

Child and Dependent Care - Cannot Apply?

It looks like the part I had missed was in the set up of my sons dependent record as you mentioned—I had to set it to “all year” manually does that the credit recognized his eligibility. Thank you!

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