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Level 2
December 7, 2019
Solved

Taxpayer has 2 qualified children but only paid childcare for one of them. How do I get one child's name off of Form 2441, Part II?

  • December 7, 2019
  • 3 replies
  • 37 views

The child with no childcare expense is 12.  Program is allowing a $1200 credit when it should only by $600

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Best answer by TaxGuyBill

No, the program is correct at allowing a $1200 credit.


From the 2441 Instructions:

If you paid qualified expenses for the care of two or more qualifying persons, the applicable dollar limit is $6,000. This limit doesn't need to be divided equally. For example, if you paid and incurred $2,500 of qualified expenses for the care of one qualifying person and $3,500 for the care of another qualifying person, you can use the total, $6,000, to figure the credit.

To qualify for the credit, you must have one or more qualifying persons. You should show the expenses for each child in column (c) of line 2. However, it is possible a qualifying child could have no expenses and a second child could have expenses exceeding $3,000. You should list -0- for the one child and the actual amount for the second child. The $6,000 limit would still be used to compute your credit unless you have already excluded or deducted, in Part III, certain dependent care benefits paid to you (or on your behalf) by your employer.

https://www.irs.gov/instructions/i2441#idm140680692399504



3 replies

taxiowa
Level 8
December 7, 2019
It is working as required.  $1,200 credit is allowed in your case
December 7, 2019

No, the program is correct at allowing a $1200 credit.


From the 2441 Instructions:

If you paid qualified expenses for the care of two or more qualifying persons, the applicable dollar limit is $6,000. This limit doesn't need to be divided equally. For example, if you paid and incurred $2,500 of qualified expenses for the care of one qualifying person and $3,500 for the care of another qualifying person, you can use the total, $6,000, to figure the credit.

To qualify for the credit, you must have one or more qualifying persons. You should show the expenses for each child in column (c) of line 2. However, it is possible a qualifying child could have no expenses and a second child could have expenses exceeding $3,000. You should list -0- for the one child and the actual amount for the second child. The $6,000 limit would still be used to compute your credit unless you have already excluded or deducted, in Part III, certain dependent care benefits paid to you (or on your behalf) by your employer.

https://www.irs.gov/instructions/i2441#idm140680692399504



abctax55
Level 15
December 7, 2019

The software is doing it correctly, tho it seems illogical.  The instructions do explain it; Lacerte provides us with a nice diagnostic explaining it (I haven't had this scenario in six/seven years). 

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