error in taxbook?

[taxmom34]

i was looking up child care credit eligibility on page 11-5.
on the chart i get to the bottom and answer "yes" and it goes to "taxpayer cannot claim the child and dependent care credit"
i get the feeling i'm reading last question wrong. "one qualifying child and can deduct at least 3000". client paid $3200 for child care, why cant he take child care credit?

[Jesse]

Just my opinion

It asks did (not can) the taxpayer have only one qualifying child and exclude or deduct at least $3000 of dependent care benefits.

I think what it is leading to is if you excluded, as perhaps through a flex plan, then you cannot claim the credit?

[S T]

ChildCare Chart

When you are at the box on the chart that says

"Did the taxpayer have only one qualifying child and exclude or deduct at least $3,000 of dependent care benefits" are you answering YES?

This is referring to Dependent Care Benefits program through Employer and excluded from income.

Are there Dependent Care Benefits in Box 10 of the t/p W-2 form?

If t/p was not participating in the Dependent Care Benefit program through employer, then you would answer the question NO, and t/p would be eligible for the Child Care Credit through the tax return.

Sandy

[taxmom34]

thank you all

i didnt have my thinking cap on. now i understand the questionl. t/p did have flex payments . so if flex payments on w2 and client payed day care, cant use 2441 because of the exclusion on w2, it would be double dipping, right? but dont we still fill out 2441 page 2 especially.

[zeros]

Fill out Form 2441

Yes you still have to fill out the form. You still need legitmate qualified expenses, otherwise the amount deferred on the w-2 would have to be added back to income.

[S T]

Form 2441

You report the Box 10- Dependent Care Benefits on your W-2 input (depending on your software) , then complete the 2441 page 1 and 2 to offset.

Sandy

[taxmom34]

that's exactly what i thought about how to handle it. just got confused about the wording on that last question in taxbook
i only saw this flex plan in examples in class when it first came out, geez around 14-15 years ago. needed some refreshing of the brain.
thank you all again for your input, you are all fantastic