Background: I am married filing jointly with my wife. We have 2 kids in two separate daycare. We both have Dependent care FSA through our jobs and we contributed a total of $5000 between us. We applied the $5000 to only one child so far since his expenses way exceed that amount. I was researching and It seems we can claim the Child care credit since the IRS allows you to apply up to $6,000 of dependent care expenses to your taxes (2 or more qualifying kids). However, we would have to minus the $5000 from the max of $6000 and then claim $1000. I am think of applying this credit to child # 2.
Questions:
1. Am I correct on the above?
2. How do I actually claim this using freetax software. I am currently using Freetaxusa. Under deductions/credits > Child care credit : I can enter my childcare provider name and address etc. It then ask "how much do you pay for each person's childcare?
a. Do I input the actual total amount of childcare for the period (e.g for the year )?
b. Do I input the $1000 under child # 2 and leave the amount under child # 1 blank
I am thinking b would be more likely correct since it states "qualifying expenses" and I only can claim $1000. I just want to be sure.
If I select b and proceed I see my refund increase at the top of the screen, however I get a message stating
" Unfortunately you don't qualify for the child care credit for the following reasons:
You have zero child care expenses eligible for child care credit because you participate in a dependent care benefit plan through work. Dependent care benefitS TAKEN OUT OF YOUR WAGES REDUCE THE AMOUNT OF CHILD CARE EXPENSES AVAILABLE FOR THE CREDIT.
This confuses me as on one hand I see the refund increasing and on the other hand I am getting this message. I haven't tried it on any other tax software as yet.
If anyone has any insight on this, I would appreciate your input. Thanks much
Questions:
1. Am I correct on the above?
2. How do I actually claim this using freetax software. I am currently using Freetaxusa. Under deductions/credits > Child care credit : I can enter my childcare provider name and address etc. It then ask "how much do you pay for each person's childcare?
a. Do I input the actual total amount of childcare for the period (e.g for the year )?
b. Do I input the $1000 under child # 2 and leave the amount under child # 1 blank
I am thinking b would be more likely correct since it states "qualifying expenses" and I only can claim $1000. I just want to be sure.
If I select b and proceed I see my refund increase at the top of the screen, however I get a message stating
" Unfortunately you don't qualify for the child care credit for the following reasons:
You have zero child care expenses eligible for child care credit because you participate in a dependent care benefit plan through work. Dependent care benefitS TAKEN OUT OF YOUR WAGES REDUCE THE AMOUNT OF CHILD CARE EXPENSES AVAILABLE FOR THE CREDIT.
This confuses me as on one hand I see the refund increasing and on the other hand I am getting this message. I haven't tried it on any other tax software as yet.
If anyone has any insight on this, I would appreciate your input. Thanks much
Statistics: Posted by tbxavier — Fri Jan 26, 2024 6:40 pm — Replies 2 — Views 171