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See what's trending for the November 15th deadline (Form 990) and resources for the upcoming tax season. View Lacerte Hot Topics.
See what's trending for the November 15th deadline (Form 990) and resources for the upcoming tax season. View Lacerte Hot Topics.
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- Earned Income requirement for spouse for Child Care Credit 2441
Earned Income requirement for spouse for Child Care Credit 2441
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PBord
Level 1
03-05-2022
01:17 PM
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If spouse was self-employed (Sch C) and had a net loss of $460, Lacerte doesn't count that as earned income for the child tax credit. Even though the earned income is negative, the spouse still worked to produce earned income and needed child care in order to work. I couldn't find anywhere in Lacerte to trigger the credit.
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abctax55
Level 15
03-05-2022
01:22 PM
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Play with HER Sch C so it show a positive... then see if the credit kicks in.
A negative Sch C doesn't represent earned "income" as it isn't income; it's a loss. Earned 'gross' isn't the same thing.
AND you could try the optional SE tax computation to see if it triggers the CTC - but I don't know if that's legit even if it does work. Research would be necessary...
HumanKind... Be Both
rbynaker
Level 13
03-05-2022
04:22 PM
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The expenses are limited to the earned income of the lesser-earning spouse. See IRC 21(d).
https://www.law.cornell.edu/uscode/text/26/21
There may be some business choices allowed by the code that could increase the spouse's earned income. Was there any equipment written off that could be depreciated over several years?
