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April 22, 2020
Question

Nothing changed (except my AGI going slightly down from 2018 to 2019) and the system isn't deducting ANY of my childcare expenses for 2019. Is there a systems error?

  • April 22, 2020
  • 1 reply
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1 reply

GiseleD
April 22, 2020

All of the below criteria must be met for the credit to be calculated. Also, this is a nonrefundable credit, which means that it can only offset tax. If there is no tax to offset, you don't get the credit. 

 

Criteria

 

Qualifying child

The taxpayer’s qualifying child is the taxpayer’s son, daughter, stepchild, foster child, sibling, stepsibling, or a descendant of any of them, who is under age 13 and can be claimed as a dependent by the taxpayer.

 

Divorced or separated parents 

Even if the taxpayer cannot claim a child as a dependent, the child is treated as the taxpayer’s qualifying person if:

• The child was under age 13 or was not physically or mentally able to care for himself or herself, and

• The taxpayer was the child’s custodial parent.

 

Abode 

The qualifying child must have lived with the taxpayer for more than half the year.

 

Support 

The qualifying child cannot have provided over half of his or her support during the year. 

 

Age

The qualifying child/dependent must be younger than the taxpayer claiming the qualifying child.  

  • Dependent must be under 13 or a disabled dependent of any age

Work-related expenses

Expenses must be for care provided so the taxpayer and spouse can work or actively look for work. No credit is allowed if a taxpayer or spouse actively looking for work does not find a job and has no earned income for the year.

 

Payments to relatives 

Qualifying expenses cannot be paid to the taxpayer’s spouse, to the parent of the taxpayer’s qualifying child under age 13, to the taxpayer’s dependent, or to the taxpayer’s child who is under age 19 at the end of the year (whether or not a dependent). Payments to other relatives, even if living with the taxpayer, qualify.

 

Income 

The credit is calculated at a percentage of the taxpayer's income. The higher the Adjusted Gross Income, the lower the percentage of childcare expenses you get to claim.

 

If any of these major factors changed for you, then your credit can be reduced or even eliminated. To learn more about other factors impacting this credit and details on the calculation percentages, click here.  

 

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