Do I qualify for the child and dependent care credit?
January 24, 2019 12:35 PM Subscribe
I'm in the USA. It seems to me that I qualify for the child and dependent care credit, yet, Credit Karma tells me no. What am I doing wrong? Or am I fundamentally misunderstanding how this credit works?
Trying to keep this short and sweet:
I have a 2.5 year old daughter. My husband and I (married filing jointly) paid ~$7000 to her day care this year while we were working. I understand I can only claim up to $3000 for a single dependent. When filling out this portion of the Credit Karma tax app, I keep getting a message I only qualify for a $0 credit. I contacted their support and was told that one cannot claim both the child tax credit & the child and dependent care credit, that if my daughter is my dependent, this credit does not apply to her.
That feels like a misunderstanding to me, I just can't see how that makes sense, but I fully accept I may be the one misunderstanding things.
To add to my confusion is this IRS page. The text itself all seems to say that we should qualify for a credit of 20% of $3000, or $600.
Is Credit Karma calculating this incorrectly? Or have I gotten myself all twisted here and just need to let this go? Aside from this wrinkle, my tax needs are very simple and I've never had trouble submitting them online before. Thanks for any help!
Trying to keep this short and sweet:
I have a 2.5 year old daughter. My husband and I (married filing jointly) paid ~$7000 to her day care this year while we were working. I understand I can only claim up to $3000 for a single dependent. When filling out this portion of the Credit Karma tax app, I keep getting a message I only qualify for a $0 credit. I contacted their support and was told that one cannot claim both the child tax credit & the child and dependent care credit, that if my daughter is my dependent, this credit does not apply to her.
That feels like a misunderstanding to me, I just can't see how that makes sense, but I fully accept I may be the one misunderstanding things.
To add to my confusion is this IRS page. The text itself all seems to say that we should qualify for a credit of 20% of $3000, or $600.
Is Credit Karma calculating this incorrectly? Or have I gotten myself all twisted here and just need to let this go? Aside from this wrinkle, my tax needs are very simple and I've never had trouble submitting them online before. Thanks for any help!
Response by poster: I just did and it says I DO qualify for the credit! Thanks for linking me to that.
posted by srrh at 12:47 PM on January 24, 2019
posted by srrh at 12:47 PM on January 24, 2019
Best answer: This is a common issue and you should probably just try another service.
posted by acidic at 12:47 PM on January 24, 2019 [1 favorite]
posted by acidic at 12:47 PM on January 24, 2019 [1 favorite]
Best answer: I think there might be some confusion about the names of the credits.
There is the child tax credit. That is separate from the dependent care tax credit.
Then there are the interrelated child and dependent care tax credit (CDCTC) and the exclusion for employer-sponsored child and dependent care. If you are taking advantage of the exclusion (which is typically done by putting money into a flexible spending account), then you are not (generally) eligible for the CDCTC.
If they are telling you that you cannot claim both the CTC and CDCTC, then they are incorrect. If they are telling you cannot claim both the dependent care exclusion and the CDCTC, then they are correct.
posted by Mr.Know-it-some at 12:53 PM on January 24, 2019
There is the child tax credit. That is separate from the dependent care tax credit.
Then there are the interrelated child and dependent care tax credit (CDCTC) and the exclusion for employer-sponsored child and dependent care. If you are taking advantage of the exclusion (which is typically done by putting money into a flexible spending account), then you are not (generally) eligible for the CDCTC.
If they are telling you that you cannot claim both the CTC and CDCTC, then they are incorrect. If they are telling you cannot claim both the dependent care exclusion and the CDCTC, then they are correct.
posted by Mr.Know-it-some at 12:53 PM on January 24, 2019
Response by poster: I am not using an FSA or any other employer-sponsored benefits for dependent care. I wouldn't normally threadsit - just clearing that up in case anyone else having this issue stumbles across this thread. It looks like it really is just a miscalculation on Credit Karma's end, yikes.
posted by srrh at 1:02 PM on January 24, 2019
posted by srrh at 1:02 PM on January 24, 2019
This thread is closed to new comments.
posted by the agents of KAOS at 12:39 PM on January 24, 2019 [1 favorite]