Reject reason: F2441-022 - If filing status of the return is Married filing separately and Form 2441 is present in the return, then 'EligibilityRequirementMetInd'

[Opus 17]

FIRST:

When married filing separately, you are disqualified from the dependent care credit. You can still use a dependent care FSA, but the limit of eligible expenses is $2500, not $5000.  Form 2441 is used to report the FSA, calculate the amount of eligible expenses, and in the case of the original poster @dayna1127, the other $2500 would be added back to their taxable income.  However you must also have custody of the child more than half the nights of the year.  Turbotax should not allow a form to be added to your return unless the credit is allowed, and the IRS should not be rejecting a return with a properly reported FSA.  Either Turbotax is reporting something wrong, or the IRS is rejecting the returns incorrectly.  I will flag this for investigation. 

Second:

It is very important that, when parents live together (married filing separately, or unmarried) that the parent who will claim the child as a dependent ignore the custody agreement question ("do you have a custody agreement with the other parent?"  Answer No.).  This question only applies to legal agreements between parents who are divorced or separated.  The other parent should not even list the child on their tax return.  When both parents list the child, conflicts can arise because the Turbotax interview is somewhat clumsy when it comes to two parents living in the same home but not filing together.  This may be the cause of xavier86's difficulty.

Also, xavier86, if you were answering questions about you paying the child's support, that means you are in the wrong part of the interview.  The question should have been, "did the child pay more than half their own support."  You may have claimed the child incorrectly and not gotten the appropriate child tax credit.  Also, if you have a dependent care benefit in box 10 of your W-2 and didn't attach form 2441, you will get a letter and a bill for extra tax from the IRS.  Please print your return and check for form 2441 (part 1 and 3 should be filled out but not part 2) and also check the amount of the child tax credit on form 1040 line 12a and schedule 3, if it is $500 per child and not $2000 per child, you made a mistake in how you identified your dependent.

[jrnixonlaw]

Unlike at least one person above, I am still having the exact same problem as initially described at the outset of this question (except that my FSA is for $2.5K - the limit for MFS). My return keeps getting rejected. Any help, please? I don't want to have to go to an accountant after spending money and time on TT, but I need to get this return filed soon. Thanks!

[wmattox4814]

@Opus 17 , your last couple of sentences were helpful.  Considering I should only have Parts I and III completed on Form 2441, any idea why the software entered an amount on line 2 of Part II?  I'm wondering if that's what's throwing everything off.

[lizandnat]

@wmattox4814 , I have the exact same problem and line 2 of Part II also is filled.

[wellsjss]

Same here. Line 2 of part II and an x in box 8 of that section as well.

[lauren-helming]

I have the same - line 2 of part ll and an X in box 8. We're going to try my husband's return through one of the free file software programs and see if we run into the same issue.

[kn3520]

I have the same issue with the PC version. MFS with a $2500 dependent care FSA. Form 2441 line 2 of part II is filled out. When I try to fix the return Turbo Tax says to re-file after March 17, 2019?!?

[wmattox4814]

@lauren.helming , please let me know what you use if it works!

@kn3520 , I'm not sure this is why our returns are getting rejected, but Form 2441 clearly says don't fill out Part II in our case.  Since you're using the PC version I think you can manually remove the info from Part II in the software's Form view.  Apparently that's not possible in the online version.  FYI, both TurboTax reps I spoke to yesterday suggested I submit fictitious/inaccurate information to get it past the IRS in lieu of waiting until the software MAYBE being fixed by 3/17/19 (noting they said it would be fixed on 1/31 and 2/15 too).

[wellsjss]

@TurboTaxCheriS is there a way that you can verify if this is the reason we are all getting rejections?

[kn3520]

I manually deleted part II of form 2441 and mine still got rejected

[wmattox4814]

@kn3520 thanks for the update.  Anybody know how I can get my $60 back from TurboTax?  I'm going to try H&R.  @lauren.helming have you had any luck?

[katy-sugano]

This is an issue on the IRS side, it is a "known issue" the IRS has logged here: <a rel="nofollow" target="_blank" href="https://webcache.googleusercontent.com/search?q=cache:ZIurjNAOqcQJ:https://www.irs.gov/pub/irs-schem...>

I called TurboTax and the support person was able to see more explicit detail of the rejection reason. If the person is 1) Married Filing Separately and 2) has an amount in box 10 of their W-2 (dependent care FSA) then the IRS system will reject the e-file due to this bug on their side. The support person with TurboTax told me the IRS says it will be resolved March 17. I will likely be mailing the return because I think this issue on the IRS side is specific to their program that auto-processes e-filed returns.

[wmattox4814]

@katy.sugano Thank you!  I'm glad to hear you got a knowledgeable TT rep.

[bookwriter]

I filed without Form 2441. My return was accepted and I got a refund deposited into my account. I'll let the IRS send me a letter saying I did everything wrong, if they really will do that. I think they won't. Next year hopefully this bug is fixed.

[dayna1127]

I was the original poster with this question- I wanted to provide an update; I did nothing differnt to the return, just logged back into TurboTax on 1/31 and my efile was finally accepted 1/31;  I have yet to receive my refund.  I try to track it on Wheres My Refund and it just keeps stating that "We have received your tax return and it is being processed." I am nearly certain that this bug in the software or whatever has now jacked my tax filing up.  Who knows when I will get my refund....