Married Filing Separately question

Forum|Forum|7 years ago
June 4, 2019
1 reply
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My wife and I are married filing separately. She is claiming our daughter (1 year old) as a dependent. I set aside money in a dependent care account that should be tax free, but TurboTax keeps saying she is over 13. Therefore, TurboTax is adding the dependent care money set aside to my taxable income. Is this a bug in TurboTax?

TurboTax Deluxe Windows

Best answer by

Edited 6:00 2/4/18

If you had Dependent Care Benefits in Box 10, W-2 and you file separately, you are generally not entitled to any child care credit and if you did have money dedicated to Child Care on your W-2, it will be taxed.

But, you have to answer that your spouse allows you to take the exemption and that you pay for more than half of the cost of maintaining the home to get credit for any DCB. The entire amount won't be excluded but a portion will be.

Here's what I finally got assuming there were $5000 in box 10 w-2.
It looks like you don't qualify for this credit because you're Married Filing Separately. It's rare to qualify for this credit when you're Married Filing Separately, but we wanted to be sure we didn't miss it if you did.
We see you've reached the allowable limits for both care expenses and care benefits. When you're Married Filing Separately, the most care expenses you can claim is $2,500 and the most care benefits you're allowed is $5,000. Taking these limits into account, $5,000 of your care benefits weren't spent. This amount will be added to your W-2 as taxable income.
How would I qualify for this credit when I'm Married Filing Separately?

Normally to qualify for the Credit:

To qualify for this credit, you must meet all of these criteria:

You (and your spouse, if filing jointly) must have earned income

The earned income requirement for one spouse is waived if s/he was a full-time student or
Disabled, if they lived with the other spouse for more than 6 months in 2017

You paid caregiving expenses so that you (and your spouse, if filing jointly) could work or look for work

The work/look for work requirement for one spouse is waived if s/he was a full-time student or
Disabled, if they lived with the other spouse for more than 6 months in 2017

You paid a caregiver to care for a Qualifying Person. The caregiver cannot be:

Your spouse;
Your dependent;
Your child if they were under 19 on the last day of 2017, even if not your dependent; or
The parent of the Qualifying Person, if the Qualifying Person is your child under the age of 13 during 2017.

You cannot file with the Married Filing Separately filing status
You must furnish the care provider's name, address, and (unless it's a tax-exempt organization) their SSN, ITIN, or EIN on your return.

The non-custodial parent can never claim the Earned Income Credit, Head of Household filing status or the childcare credit, based on that child, even when the custodial parent has released the exemption to him.

A

Anonymous

Answer

Edited 6:00 2/4/18

If you had Dependent Care Benefits in Box 10, W-2 and you file separately, you are generally not entitled to any child care credit and if you did have money dedicated to Child Care on your W-2, it will be taxed.

But, you have to answer that your spouse allows you to take the exemption and that you pay for more than half of the cost of maintaining the home to get credit for any DCB. The entire amount won't be excluded but a portion will be.

Here's what I finally got assuming there were $5000 in box 10 w-2.
It looks like you don't qualify for this credit because you're Married Filing Separately. It's rare to qualify for this credit when you're Married Filing Separately, but we wanted to be sure we didn't miss it if you did.
We see you've reached the allowable limits for both care expenses and care benefits. When you're Married Filing Separately, the most care expenses you can claim is $2,500 and the most care benefits you're allowed is $5,000. Taking these limits into account, $5,000 of your care benefits weren't spent. This amount will be added to your W-2 as taxable income.
How would I qualify for this credit when I'm Married Filing Separately?

Normally to qualify for the Credit:

To qualify for this credit, you must meet all of these criteria:

You (and your spouse, if filing jointly) must have earned income

The earned income requirement for one spouse is waived if s/he was a full-time student or
Disabled, if they lived with the other spouse for more than 6 months in 2017

You paid caregiving expenses so that you (and your spouse, if filing jointly) could work or look for work

The work/look for work requirement for one spouse is waived if s/he was a full-time student or
Disabled, if they lived with the other spouse for more than 6 months in 2017

You paid a caregiver to care for a Qualifying Person. The caregiver cannot be:

Your spouse;
Your dependent;
Your child if they were under 19 on the last day of 2017, even if not your dependent; or
The parent of the Qualifying Person, if the Qualifying Person is your child under the age of 13 during 2017.

You cannot file with the Married Filing Separately filing status
You must furnish the care provider's name, address, and (unless it's a tax-exempt organization) their SSN, ITIN, or EIN on your return.

The non-custodial parent can never claim the Earned Income Credit, Head of Household filing status or the childcare credit, based on that child, even when the custodial parent has released the exemption to him.

B

bigal0584Author

Level 2

Thanks Coleen. We all do live together. I have set aside money in a dependent care account so I do not expect to get the Child Care Credit. My issue is that the money is paying for my one year old's day care expenses, and is set to come out of my paycheck tax free. TurboTax is claiming she is over 13 and therefore, the money set aside tax free is being taxed by TurboTax. I was under the impression that even if we file separately, I can still pay for child care expenses tax free.