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nicarawson
February 25, 2025
Solved

Why don't we qualify for the dependent care credit?

  • February 25, 2025
  • 1 reply
  • 0 views
I earned approximately 250k this year and my wife is a full time student. The reason given is that: "Since your $15,080 in care expenses wasn't enough to use up the $4,246 you contributed to your employer's dependent care plan, your Child and Dependent Care Credit is $0." I'm at a loss. Other forums say we both need income, but she's a full time student - which should qualify even though she didn't have earned income. I'm at a loss.
    Best answer by Bsch4477

    I assume you have one child. The maximum expense qualifying for the credit for one child is $3,000. But you already exceeded that with your employer’s plan. So you maxed out your benefit. As an aside, it is better to use your employer plan since it saves you money on paying payroll taxes. 

    1 reply

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    Bsch4477Answer
    Employee
    February 25, 2025

    I assume you have one child. The maximum expense qualifying for the credit for one child is $3,000. But you already exceeded that with your employer’s plan. So you maxed out your benefit. As an aside, it is better to use your employer plan since it saves you money on paying payroll taxes. 

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