form 2441 CPYE in Lacerte

[nwtaxlady]

I have this issue that I want to get other people's input on.

2008 taxpayer had dependent care benefits of $2700 and had childcare expenses of $2801. Therefore got a Childcare credit based on the difference $101.

This year 2009, taxpayer has a dependent care benefits of $630 and childcare expenses of $612 and so would get the credit based on the difference right? Only $18 comes to $4 for her.

Lacerte comes up with a CPYE next to line 9 with amount of $40 and a statement. The statement calculates this based on childcare amount of $3000 less $2700 = $300 Then subtracts $101 from that and gives her more of $199 ($300-$101=$199) credit of $40. How could this be if she only had childcare expenses of $2801 and used up all of it after $2700 of DCB $101 ??? How can she get a credit for money she didn't pay????

I called Lacerte. Lady took me to IRS website pub 503 and said this is where Lacerte is getting this worksheet.

http://www.irs.gov/publications/p503/ar02.html

I said to her see at the top of the worksheet is says, "Use this worksheet to figure credit you may claim for 2008 expenses paid in 2009". ??? This is not my clients case. All the expenses where paid in 2008. Lacerte lady is telling me that she was entitled to $3000. I don't think so....

Does anyone else agree with me or am I way off here?

Has anyone else seen this in Lacerte or other software?
Any input would be appreciated.
Thanks.

http://www.irs.gov/publications/p503/ar02.html

[David1980]

CPYE = Credit for Prior Year Expenses?

That would be when you have expenses in 2009 for child care provided in 2008. Does that fit into your situation at all?

From what I'm reading, it doesn't look like it. In which case it makes me wonder if something got entered somewhere in the software showing that expenses were prior year expenses?

It's like Lacerte thinks the total expenses were $3000 last year, but only $2801 were paid in 2008 and the other $199 was paid in 2009. I'd be double checking to see if there's an erroneous entry somewhere in the software.

[nwtaxlady]

the expenses were in 2008

CPYE = Credit for Prior Year Expenses?

That would be when you have expenses in 2009 for child care provided in 2008. Does that fit into your situation at all?

From what I'm reading, it doesn't look like it. In which case it makes me wonder if something got entered somewhere in the software showing that expenses were prior year expenses?

It's like Lacerte thinks the total expenses were $3000 last year, but only $2801 were paid in 2008 and the other $199 was paid in 2009. I'd be double checking to see if there's an erroneous entry somewhere in the software.

You are reading it right. The expenses were paid in 2008. I checked, there is nothing in the program from last year or this year regarding expenses paid in 2009 for 2008. I checked all that out. NOTHING! I spent hours on the phone with Lacerte. They are saying that the taxpayer gets the difference of UP to the $3000. The amount spent was only $2801. I have never seen that you can take UP TO the limit when you didn't pay it. They are saying you can. I have never seen this in my MANY years of practice. It might be something new?? It only does it if you have the Dependent Care Benefits.

Is this something new? I am curious if anyone else has seen this? Or know of this NEW thing that Lacerte says is correct??