, Answering FAQ'sTurboTax Employee
When you pay for a dependent's care so that you can work or go to school full-time, the Child and Dependent Care Expense Credit can reduce your tax bill. To qualify for the credit, you (and when married, your spouse filing jointly) must:
- Have earned income; and
- Paid someone else to care for a child under age 13 for at least part of the year, or a disabled spouse, or dependent; and
- Paid the expenses so you could work, look for work, or go to school full time.
Don't confuse the Child and Dependent Care Expense Credit (which is reported on Form 2441) with the similar-sounding Child Tax Credit (reported on Forms 1040/1040A and 8812).
What are some reasons I might not qualify?
You can find more at the IRS Topic 602 - Child and Dependent Care Credit. or Ten things to know about the Child and Dependent Care Credit For complete information about this credit, refer to IRS Publication 503. (Page 4 contains an excellent flowchart to help you determine if you qualify.)
We also have some quick answers to questions you might be wondering about...
Can I claim this credit if my spouse is unemployed?
To claim the credit (assuming you meet the qualifications) your non-disabled, unemployed spouse must:
- Have looked for work during the time the child care expenses were incurred; and
- Have earned income during the year. (Unemployment income is not considered earned income.)
If your unemployed spouse is disabled or a full-time student, the IRS treats them as though they have earned income, provided you are not disabled or going to school full time yourself.
Can I get this credit if I do not claim the child as a dependent?
Possibly. If you were the child's custodial parent (that is, the parent with whom the child lived for the greater number of nights during the year) and the child was under the age of 13 for at least part of the year or is unable to physically or mentally care for themselves, you can qualify for the credit as long as the other conditions are met.
On the other hand, noncustodial parents do not qualify for the credit even if they are able to claim the child as a dependent.
Does preschool tuition count?
Yes. Nursery school, preschool, and similar pre-kindergarten programs are considered child care by the IRS, as do fees for summer day camps.
But, tuition for kindergarten and higher grades and costs of overnight summer camps do not qualify as child care.
Where do I find the Child and Dependent Care Expense Credit in TurboTax?
If you've already gone through the step-by-step interview and want to jump directly to the entry screen for this topic, follow these steps.
- Select Federal Taxes (Personal in Home & Business).
In Online TurboTax, click the bars at the upper left corner to show Federal Taxes on the selection list; enlarge the screen if needed to show the left side selection list.
- Select Deductions & Credits, and on one of the next screens, click I'll choose what I work on.
- Scroll down the Your Deductions & Credits screen to the You and Your Family group.
- Click Start/Update next to the Child and Dependent Care topic.
- Follow the prompts.
I used a cafeteria plan or flexible spending account to pay for care! What do I enter?
IMPORTANT: When TurboTax asks how much you paid for dependent care, enter the TOTAL, including any expenses that were paid with funds from a flexible spending account or cafeteria plan. The total care expenses off-set the amount set aside in your spending account (reported on your W-2), and any remaining expenses are applied toward the credit.
For example, if you used $1,000 from a flexible spending account to pay for child care, but the dependent care cost a total of $3,000 (what you enter for total care costs), we calculate the credit using the remaining $2,000.