Dependent Care Benefits incorrectly taxed?

Forum|Forum|3 years ago
March 28, 2023
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I have dependent care benefits of about $1200. Both my husband and I have earned income greater than $1200. He has W-2 wages and I have Schedule C earned income. When filling out Form 2441 by hand, I get the result that my dependent care benefits are not taxable, yet TurboTax has the $1200 on 1040 Line 1e. ??

CatinaT1

Sounds like an entry is missing.

You have Schedule C income. Just to confirm, do you have a net profit after expenses are deducted? You must have a net profit of at least $1200 for the dependent care benefit to be non-taxable.
Your husband has a W2 with $1200 in box 10.
You entered dependent care expenses in excess of $1200, correct?

Please confirm these things. I am guessing your Schedule C net income is not at least $1200.

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FessingdonBadgersAuthor

Thanks for responding. Please see responses below...

You have Schedule C income. Just to confirm, do you have a net profit after expenses are deducted? You must have a net profit of at least $1200 for the dependent care benefit to be non-taxable. [Yes, Schedule C net income is $2400]
Your husband has a W2 with $1200 in box 10. [Correct.]
You entered dependent care expenses in excess of $1200, correct? [This must be it. I did not because I do not work full-time. I think I'm not eligible for the credit.]

CatinaT1

You don't need to have worked full-time to be eligible. You have to have care that was provided for the purpose of allowing you to work (among other requirements).

You will need to enter the care provider's information and the amounts paid. This will reconcile that the amount in box 10 was used for dependent care and will no longer be taxable. Additionally, if you paid more than $1200 for care may make you eligible for the Child and Dependent Care Credit.

Child and Dependent Care Credit

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