form 2441 qualified dependent care expense over age 13

[BCW60]

I received IRS notice of tax correction for client with two children, Ages 12 & 15.  (Neither is Disabled)

I entered child care expenses for both children, and the program carried the total of both children's expenses into form 2441 Line 3.   This effectively gave the full deduction for both children, as apposed to only the 12 year old's expenses.

My client asked me why Intuit's software would allow this, if neither child was listed as disabled.  Due to this calculation error, my clients now owe an additional $232.  (They are first year clients)

I believe the software should have prevented the flow of expenses for the 15 year old child (absent marking him disabled), and the tax calculation would then be correct.

I would appreciate a chance to discuss this with an appropriate level of programmer when this is addressed.

[IRonMaN]

"I believe the software should have prevented the flow of expenses for the 15 year old child (absent marking him disabled), and the tax calculation would then be correct."

Professional tax software is a tool.  Professional tax preparers are still responsible for reviewing the completed return prior to providing the client with a copy.  The software either dropped the ball or you either have an error in the birthdate or a box got checked accidently. Since you loaded in child care expenses for a 15 year old, I am hoping that you entered the wrong birthdate for the kid and thought he was a qualifying child.

[BCW60]

I thought I was submitting a suggestion for software correction.   I didn't realize this was also available for community discussion.  So with that, I guess I will respond.

IronMan - I agree with much of your response.  Ultimately, after all my input, I should always review tax return to see if it is calculating as I would expect based on the details of my clients input.  I try to do a thorough review on every return.  That being said, a minor calculation error on a form is not as easy to discern sometimes, especially with a long day of client meetings.

As to your additional comments 

1) yes, I could have discerned the older child's age as I was reviewing the invoice for the dependent care.   

2) yes, I believe the software dropped the ball.  The birthdate is entered correctly since it shows as age 15 on the dependent section of the information page.

I already submitted a santized file for review, and if I understood the verbal explaination on my call, they suggested that since there are additional ways that the child & dependent care expenses may be qualified expenses, it won't automatically prevent the calculation for over age 13.  

I would like to better understand what additional ways that a child or dependent may qualify.  The only way I am aware is a disabled child or dependent will qualify at any age.  Therefore, If I had checked the box in the dependent section (Information page), the expenses would then be qualified and flow to form 2441.  To be clear, the disabled box was NOT checked, so that is why I would not expect the software to allow the expense of a 15 yr old child to flow through to Form 2441.

For yours or the community's sake, I hope I have given a thorough enough response for you to understand that I don't take this type of activity lightly, and want to make sure that a simple calculation error may need to be corrected within the software to benefit us all.

[IRonMaN]

We are all human and anybody that says they never let a return go out the door that had an error that wasn't caught would by lying.  I've been around this place a long time and every now and then Intuit software does weird things that can't be explained.  That's when you get nervous after seeing a post like this and start looking at your own returns to make sure you weren't affected too.😉  

[Norman2001]

Thanks for the information BCW60.  I did a test tax return and sure enough the dependent care credit was allowed for a dependent over 13 (actually 22). 

I hope proseries puts an age check into the software.  If the IRS can do it, I would think proseries could do it too. 

[Accountant-Man]

Doesn't an error message appear when you "review" the return? It's a green diagnostic that references the age and the expenses, but it doesn't remove the expenses or credit.

That's the preparer's job.

[Skylane]

There’s a diagnostic alert in final review… (I thought it was yellow)…. but the software just ‘advertises’ there ‘may’ be an issue…

My recollection is that the NY program will issue an Error if age >12 You have to check a ‘disabled’  box to get the credit to calculate… 

Always thought they should handle the federal the same way.

[Norman2001]

The diagnostic banner is Green. It would be more helpful if it was other than green. 

[Anonymous]

Thanks for the idea to "change banner for diag 1.161 for child care credit from Green to Red". We are changing the status to "Open for voting" since it is no longer considered "New".

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