If TurboTax is telling you you do not qualify there could be a few reasons. Your child's information is incorrect (missing information) Go back and double check the personal info section to be sure you accurately answered all of the questions regarding your children and yourself. You entered income for one of you but not both of you. Double check to be sure that when you entered your income, you selected that it belonged to the right person. You did not enter your income yet. Your income is too high. If your income for the year was greater than $438,000 for married filing jointly, you would not qualify for the Dependent Care Credit.(Edited 2/24/2022 @ 8:27AM PST)

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Why is Turbotax telling me that we dont qualify for Child and Dependent Care, when we have a substantial bill this year? What would cause us to be disqualified?

Forum|Forum|4 years ago
February 24, 2022
6 replies
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TurboTax Premier Online

Best answer by RaifH

By deleting the child and adding them back, the movement on the refund was probably due to the Child Tax Credit, which is different than the Child and Dependent Care Credit.

In addition to what the other posters have said about both of you needing earned income and your child must be under 13 to receive the Child and Dependent Care Credit, did either you or your spouse receive Dependent Care Benefits in Box 10 of your W-2? If you did, this can reduce or eliminate the Child and Dependent Care Credit for which you would be eligible.

An easy way to see if you are currently getting the Child and Dependent Care Credit is to preview your Form 1040:

Open or continue your return.
Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
With the Tax Tools menu open, you can then view your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu
Scroll down until you see Schedule 3 Line 13g Credit for child and dependent care expenses. If you received anything it would also be on Form 1040, Line 31. If you are not currently receiving the credit, you may not have a Schedule 3 on your return in which case Line 31 of Form 1040 will be blank.

X

xmasbaby0

Employee

Have you entered your income earned from working yet? If you have not entered income from a W-2 or from self-employment showing a profit the forms for the childcare credit will not populate. Is your child younger than 13? Are you filing a joint return? You cannot get the childcare credit if you file married filing separately.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

V

Vanessa A

If TurboTax is telling you you do not qualify there could be a few reasons.

Your child's information is incorrect (missing information) Go back and double check the personal info section to be sure you accurately answered all of the questions regarding your children and yourself.
You entered income for one of you but not both of you. Double check to be sure that when you entered your income, you selected that it belonged to the right person.
You did not enter your income yet.
Your income is too high. If your income for the year was greater than $438,000 for married filing jointly, you would not qualify for the Dependent Care Credit.

(Edited 2/24/2022 @ 8:27AM PST)

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S

shivani128Author

1. Can confirm, all dependent information entered- Turbotax gave this message "Good news! XYZ qualifies as your dependent."

2./3. Can confirm income entered for both of us - Married filing Jointly.

4. Income far lower than the $438,000 threshold mentioned below.

and yet I get this message-"It turns out you don't qualify for this credit".

I'm really bummed!

X

xmasbaby0

Employee

You have to make sure you entered income under each spouse's name on the income screens. If you entered it all under only one of your names it messes you up and you cannot get the childcare credit.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

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shivani128Author

An update - I think this is a bug in Turbo tax's browser. I deleted my dependent to re-add them. As soon as I did that, I saw that my refund reduce considerably. When i added my dependent back, the refund went back to what it was before the deletion. This tells me that the deduction may be getting applied, but browser takes me to the "You don't qualify for the Child and Dependent Care" deduction, regardless.

Either that, or there is something that I cant explain.

In any case, turbtox product managers should review this issue.

R

RaifHAnswer

By deleting the child and adding them back, the movement on the refund was probably due to the Child Tax Credit, which is different than the Child and Dependent Care Credit.

In addition to what the other posters have said about both of you needing earned income and your child must be under 13 to receive the Child and Dependent Care Credit, did either you or your spouse receive Dependent Care Benefits in Box 10 of your W-2? If you did, this can reduce or eliminate the Child and Dependent Care Credit for which you would be eligible.

An easy way to see if you are currently getting the Child and Dependent Care Credit is to preview your Form 1040:

Open or continue your return.
Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
With the Tax Tools menu open, you can then view your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu
Scroll down until you see Schedule 3 Line 13g Credit for child and dependent care expenses. If you received anything it would also be on Form 1040, Line 31. If you are not currently receiving the credit, you may not have a Schedule 3 on your return in which case Line 31 of Form 1040 will be blank.

B

bmpeterson7

Box 10 in my W-2 indicates $5000 but that was money I elected to take out of my paycheck and put into a dependent care FSA throughout the year; it was not additional dependent care support from my employer.

I'm confused as to why my dependent care tax credit is reduced/eliminated because I put money in an FSA.

1) Should I check with my employer as to whether it's an error on my W2? and

2) If it's not an error, and contributing to a dependent care FSA reduces/eliminates my dependent care tax credit, is it better to not have a dependent care FSA?

M

mrcargirl

This may not be the case for you, but if you have two or more children that qualify but all of the expenses were paid for one child, you must add the second (or third...) child and say $0 for expenses.

Bosscandy13

I have two children 1 is 13 the other is 8. I have income and have qualified for dependent care every year. I know only my 8 year old qualifies for the credit so why is turbo tax not adding the credit?

CatinaT1

It's possible you don't owe any more tax, and that's why you don't qualify. The child and dependent care tax credit is nonrefundable, which means the credit cannot reduce your tax any further if it is already zero.

Make sure you meet all the qualifiers for the credit.

To qualify for the Child and Dependent Care Credit, ALL of the following must be true:

Your dependent is listed (and is either under age 13 or is marked as disabled).
You have earned income.
Your spouse (if filing jointly) also has earned income, is a full-time student, or is disabled.
Your filing status is not Married Filing Separately.
You have provided the caregiver's social security or tax ID number.
You must owe tax.

The child and dependent care tax credit is nonrefundable, which means the credit cannot reduce your tax any further if it is already zero.  So it's possible you don't owe any more tax, and that's why you don't qualify! 

You can check to be sure that is what is happening by viewing your Tax Summary.   Here is how to do that:

Log in to your tax return at TurboTax.com.

Click on Tax Tools on the left side of the screen (you may need to click on Continue in the center first).
Click on Tools.
In the box that pops up in the center, click on View Tax Summary.
If you see a 0 for Total Tax, then that is the reason you don't qualify for this particular credit.

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Critter-3

On the 2021 tax year ONLY the child care credit was huge and fully refundable but this year (2022) the credit is back to being limited to your tax liability.

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vitosals

My wife and I have earned income, over $10,000 in qualifying expenses, have a federal tax obligation, and make less than the AGI cut-off. TurboTax says we do not qualify and provides no explanation or help other than to try to push us to their premium service. After 8 years, I am done using TurboTax. The software is glitchy and customer service is poor.

JohnB5677

I suggest you look at your tax return and see if you can identify something.

On the menu bar on the left that shows.
1. My Info
2. Federal
3. State
4. Review
5. File
Select Tax Tools
On the drop-down select Tools
On the popup menu
Select View Tax Summary
On the left sidebar
Select Preview my 1040.

Line 24 is Total Tax

Lines 27,28,29 are credits that have already been applied.

If your Total Tax minus the other credits does not still result in a tax owed, you will not get the credit.

For 2022, the credit for child and dependent care expenses is nonrefundable and you may claim the credit on qualifying employment-related expenses of up to $3,000 if you had one qualifying person, or $6,000 if you had two or more qualifying persons. The maximum credit is 35% of your employment-related expenses.

Also see: Publication 503 (2022), Child and Dependent Care Expenses and The Ins and Outs of the Child and Dependent Care Tax Credit

@vitosals

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J

jarealio

I have the same exact problem - "It turns out you don't qualify for this credit," despite meeting every requirement. Filing jointly, 2 working parents, each with income reported, way below AGI cap. ~$5000 in qualifying dependent care expenses. Care provider listed, including EIN. Non-zero tax liability after accounting for other credits. Dependent info all correctly entered and qualify for child tax credit. Checked 1040 Preview to confirm total tax > $0, child tax credit correctly applied, but no Dependent Care credit listed. I have entered and re-entered and always get the same unhelpful end result. This is baffling.