How to enter Dependent Care Credit, Form 2441 in Lacerte

Table of contents:

Follow these steps to enter dependent care information:

1. Go to Screen 33, Dependent Care Credit (2441).
2. Enter the following information in the Persons and Expenses Qualifying for Dependent Care subsection:
   • First name: If the eligible child's name, Social Security number, and date of birth are different from the name, Social Security number, and date of birth entered on Screen 2, Dependents, in the respective input fields enter the child's first name, last name, suffix or title, Social Security number, and date of birth.
     • You can press [Ctrl]+[T] and select the qualified dependent to enter the information from Screen 2, Dependents.
     • The child's name and Social Security number entries print beside Form 2441, line 3.
   • Last name
   • Title or suffix, if applicable
   • Date of birth - If the eligible child was born and died in the same year and didn't have a Social Security number, enter Died in the Social Security number input field.
     • A copy of the child’s birth certificate, death certificate, or hospital medical records should be attached to Form 2441.
   • Social security number
   • Qualified dependent care expenses incurred and paid in 2023 (MANDATORY) - This entry is mandatory to generate a Child and Dependent Care Credit.
     • Enter the qualified expenses incurred and paid for the care of the qualified person(s).
     • Lacerte limits this amount to $3,000 when the number of dependents cared for was one; or to $6,000 when the number of dependents cared for was two or more.
     • Lacerte might reduce the expenses when the taxpayer received employer-provided benefits and Form 2441, Part III applies. The limited qualified expenses carry to Form 2441, Part II.
   • Disabled, if applicable: Select the box (or enter 1), if dependent care expenses were incurred due to a disabled spouse or dependent who isn't able to care for himself or herself.
   • The dependent care credit won't be allowed for a person over the age of 13 who isn't disabled. In the General Information screen, use Other earned income (or if spouse was disabled or a student) [A] (Screen 33) to adjust the earned income for a disabled spouse.
3. If you have multiple Persons & Expenses Qualifying for Dependent Care Credit, select the 2 from the left panel in the Dependent section and repeat until all dependents have been listed.
4. From the 2441 list on the left, select Persons or Organizations Providing Dependent Care.
5. Enter the following information under Persons or Organizations Providing Dependent Care:
   • Name: Enter the name of the person(s) or organization(s) providing dependent care. This information prints on line 1, column (a).
   • Street Address: Enter the complete address of the person(s) or organization(s) providing dependent care. There are state and ZIP code fields for domestic addresses and region, ZIP code and country fields for foreign addresses. This information prints on line 1, column (b).
   • City
   • US: If the address is within the United States:
     • State
     • Zip
   • Foreign: If the address is outside the United States:
     • Region
     • ZIP code
     • Country: Choose the appropriate country using the dropdown menu provided.
   • Identification number (SSN or EIN): Enter the identification number of the person(s) or organization(s) providing dependent care. This information prints on line 1, column (c).
   • Total amount paid to care provider in 2023 for all dependents: Enter the total amount paid to the person(s) or organization(s) providing dependent care. If person(s) or organization(s) cared for more than one dependent, enter the total amount paid for all dependents. This information prints on line 1, column (d).
6. If you will be filing the return electronically, complete the following EF Only information, otherwise skip to the next step.
   • Identification number is SSN: Select the box (or enter 1) if the provider’s identification number entered in identification number (Social Security number or EIN) is a Social Security number.  If no entry is made in this field, Lacerte assumes the entry is an Employer Identification Number.
   • Taxpayer is unable to find the provider to get the identification number as provider has moved: Select the box if the taxpayer is unable to find the provider to get the provider’s identification number as the provider has moved.  This entry will be included in the e-file to show that due diligence has been taken to obtain the provider’s identification number.
   • Provider refuses to provide the identification number: Select the box if the provider refuses to provide the taxpayer with the provider’s identification number. This entry will be included in the e-file to show that due diligence has been taken to obtain the provider’s identification number.
7. If you have multiple Persons or Organizations Providing Dependent Care to report, select the 2 from the left panel in the Provider section and repeat step until all Providers have been listed.

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.

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How to generate US Form 2441 for spouse who is disabled

Perform the following steps to indicate that the spouse is disabled for the Form 2441 calculation:

1. On the Detail tab, go to Screen 33, Dependent Care Credit (2441).
2. Select General Information in the Dependent box on the left side of the screen.
3. Enter the appropriate amount in the field, Number of months disabled or full-time student, under the appropriate column, Taxpayer or Spouse.

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How do you enter Dependent Care Benefits For Form 2441, Part III, Line 12

Dependent Care Benefits reported on the W-2, box 10 should be entered in Screen 10, Wages, in the field (10) Dependent care benefits (code 12).

To enter Dependent Care Benefits not reported on W-2:

1. Go to Screen 33, Dependent Care Credit (2441).
2. Select General Information in the Dependent box on the left side of the screen.
3. Enter the appropriate amount in the appropriate field under Dependent Care Benefits.
4. Enter other applicable information as needed.

The total amount of dependent care benefits will show on page 2 of the Form 2441, Part III, Line 12.  Part III of Form 2441 is used for computing the taxable benefits.  The taxable amount of benefits will show on Form 2441, Line 26 and will also show in the space to the left of Line 1 of Form 1040 with the initials "DCB".

Note: Dependent Care Benefits (DCB) from a sole proprietorship or partnership should also be entered in the input screens for each respective business.  For example, DCB from a Partnership K-1, box 13 would be entered in both Dependent Care Credit screen 33 and Passthrough K-1 screen 20.1.

CAUTION: If filing Married Filing Jointly, both the taxpayer and the spouse's earned income are involved in determining taxable and nontaxable benefits.  If either taxpayer or spouse do not have earned income, then the Dependent Care Benefits will be taxable, per the 2441 calculation and instructions.

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