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Common questions for Form 2441 in ProConnect Tax

by Intuit•1• Updated 4 months ago

How does ProConnect Tax calculate line 3?

If your client received any dependent care benefits, ProConnect Tax will complete Part III of Form 2441 to determine how much of the care expenses were already covered by deductible or excluded benefits, and can't be used to calculate the credit.

Dependent care benefits from partnership or sole proprietorship are not flowing to the 2441

Dependent care benefits you enter on Schedule K-1, Schedule C, or Schedule F must also be entered on Input Return ⮕ Credits ⮕ Dependent Care Credit (2441), under the General Information section in the top right corner, in the field labeled Sole proprietorship or partnership. This allows the program to calculate the amount of benefits that are deductible or taxable for purposes of the credit. Once the credit is calculated, you may need to adjust your inputs on Schedule K-1, C, or F to report only the amount of benefits that were deductible.

Claiming the Dependent Care Credit in a married filing separate return with dependent care expenses:

When a taxpayer is filing MFS and has dependent care expenses, there are certain requirements that must be met to be able to take the credit. The  taxpayer would be "treated as unmarried."

To exclude the dependent care benefits from the return:

  1. Go to Input Return ⮕ Credits ⮕ Dependent Care Credit (2441)
  2. Click on the General Information button in the top right.
  3. Enter 1 in, 1 = married filing separate and treated as unmarried

Dependent Care Benefits for Form 2441 Part III Line 14

Use this article to determine where to enter dependent care benefits for Form 2441, part III, line 12. Benefits may be entered in a few different places, depending on how you received them.

For benefits reported on a W-2:

  1. Go to the Input Return tab.
  2. On the left-side menu, select Income.
  3. Click on Wages, Salaries, Tips (W-2).
  4. Scroll down to the Wages section.
  5. Enter the amount in (10) Dependent care benefits.

For benefits reported on a partnership K-1:

  1. Go to the Input Return tab.
  2. On the left-side menu, select Income.
  3. Click on the Partnership Info (1065 K-1) screen.
  4. On the left-side menu, select Line 13 - Other Deductions.
  5. From the K-1 Code list, select O=Dependent care benefits.
  6. Enter the amount.

For benefits reported on a partnership K-1:

  1. Go to the Input Return tab.
  2. On the left-side menu, select Income.
  3. Click on the Partnership Info (1065 K-1) screen.
  4. On the left-side menu, select Line 13 - Other Deductions.
  5. From the K-1 Code list, select O=Dependent care benefits.
  6. Enter the amount.

If Form 2241, Child and Dependent Care Expenses, isn't generating in Intuit ProConnect, it's likely because of one of the following reasons:

  • The taxpayer or spouse has no earned income
  • The dependent information is incomplete

Select the applicable situation below more information.

For tax year 2021 only:

  • The expense limit has been raised to $8,000 for one individual, and to $16,000 for more than one.
  • The maximum credit percentage has been increased to 50% and the credit itself is refundable.
  • AGI phaseout has been significantly increased. This will be seen in the calculations on Form 2441.
  • See the 2021 IRS Pub. 503 for more information.

This temporary increase was not extended for tax year 2022 returns.

To claim this credit, the taxpayer (and spouse, if married) must both have taxable earned income. An exception applies for full-time students and disabled persons. Earned income for Form 2441 includes:

  • Wages reported on a W-2, box 1
  • Schedule C income
  • Schedule F income
  • Net earnings from self-employment (from a partnership or s corp K-1)
  • Disability pensions

Earned income is also reduced by any loss from self-employment.

You must enter the qualifying person's (or dependent's) information to generate the credit. A qualifying person is generally a child under age 13 who the taxpayer can claim as a dependent, a disabled spouse, or disabled person who the taxpayer can claim as a dependent.

Follow these steps to verify the qualifying person's information:

  1. Go to the Input Return tab.
  2. From the left of the screen, select Credits and choose Dependent Care Credit (2441).
  3. Choose Children, Dependents.
  4. Make sure the necessary fields are completed:
    • First name
    • Last name
    • Date of birth
    • Social security number
    • Qualified dependent care expense incurred and paid in 2023 (MANDATORY)

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