Since there is no upper limit on how much you can earn, Were both of you working? Do either of you have dependent care benefits listed in Box 10 on your W-2's? If you did that amount is subtracted from the maximum amount of expenses eligible to be claimed, For example if you have one child the maximum amount of eligible expenses is $3,000 if you have dependent care benefits of $3,000 or more you will not qualify for the credit. Figuring the creditThe size of your credit is based on how much you spend for child and dependent care, as well as your income. TurboTax guides you through the process of figuring your credit and fills in the proper form for you, but in general, it works like this: Add up the total amount of your care expenses that qualify for the credit. The maximum amount of care expenses you're allowed to claim is $3,000 for one person, or $6,000 for two or more people. If your employer gives you money to pay child care expenses, or if you have money withheld from your pay on a pre-tax basis, you must subtract this money received from your allowable expenses. Compare your claimed expenses with your earned income and, if you're married, your spouse's earned income. Take the smallest of all these amounts. These are your "allowable expenses." Your credit is a percentage of your allowable expenses. That percentage ranges from 20% to 35%. The higher your income, the smaller your percentage, and therefore the smaller your credit. But as Becker notes, there is no upper limit on income for claiming the credit.

Question

Why is it saying we do not qualify for a childcare credit if we jointly make about $275,000 and paid $1200 per month for daycare?

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February 5, 2020
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JFRAHER

Since there is no upper limit on how much you can earn, Were both of you working? Do either of you have dependent care benefits listed in Box 10 on your W-2's? If you did that amount is subtracted from the maximum amount of expenses eligible to be claimed, For example if you have one child the maximum amount of eligible expenses is $3,000 if you have dependent care benefits of $3,000 or more you will not qualify for the credit.

Figuring the credit

The size of your credit is based on how much you spend for child and dependent care, as well as your income. TurboTax guides you through the process of figuring your credit and fills in the proper form for you, but in general, it works like this:

Add up the total amount of your care expenses that qualify for the credit. The maximum amount of care expenses you're allowed to claim is $3,000 for one person, or $6,000 for two or more people.
If your employer gives you money to pay child care expenses, or if you have money withheld from your pay on a pre-tax basis, you must subtract this money received from your allowable expenses.
Compare your claimed expenses with your earned income and, if you're married, your spouse's earned income. Take the smallest of all these amounts. These are your "allowable expenses."
Your credit is a percentage of your allowable expenses. That percentage ranges from 20% to 35%. The higher your income, the smaller your percentage, and therefore the smaller your credit. But as Becker notes, there is no upper limit on income for claiming the credit.