Child & Dependent Care Credit for two "Qualifying Children"

[mikeburg]

Am I seeing this right?

I have taxpayers who have two "Qualifying Children" (one 4 & one 9 years old).

They pay 6090 day care for the 4 year old.

The 9 year old does not go to day care but is otherwise a "Qualifying Child".

Do the taxpayer's get to use $6,000 or $3,000 for their day care credit?

I appreciate any information on this so much. mikeburg

[rtsietsema]

Only one qualifying child with expense

From the way you describe it, only one qualifying child has expenses. While the second child is of the proper age and meets all the requirements to qualify, since no expense was paid for their care you cannot consider two children in completing form 2441.

Form the IRS instructions...

"These include amounts paid for household services and care of the qualifying person while you worked or looked for work."

No payments made for the care of the child, means you cannot include them on Form 2441. The maximum amount to use for figuring the credit would be $3000.

[David1980]

You don't need expenses for the qualifying child to be a qualifying child. Sounds like two qualifying children to me.

From 2441 instructions:

If you paid qualified expenses for the care of two or more qualifying persons, the applicable dollar limit is $6,000. This limit does not need to be divided equally. For example, if you paid and incurred $2,500 of qualified expenses for the care of one qualifying person and $3,500 for the care of another qualifying person, you can use the total, $6,000, to figure the credit.
To qualify for the credit, you must have one or more qualifying persons. You should show the expenses for each child in column (c) of line 2. However, it is possible a qualifying child could have no expenses and a second child could have expenses exceeding $3,000. You should list -0- for the one child and the actual amount for the second child. The $6,000 limit would still be used to compute your credit unless you have already excluded or deducted, in Part III, certain dependent care benefits paid to you (or on your behalf) by your employer.

[BP.]

taxpayers who have two "Qualifying Children"

Do the taxpayer's get to use $6,000 or $3,000 for their day care credit?

Agree with David1980- $6,000.

[rtsietsema]

Are you sure?

Look carefully at the IRS instructions.

"If you paid qualified expenses for the care of two TIP or more qualifying persons, the applicable dollar
limit is $6,000. This limit does not need to be divided equally. For example, if you paid and incurred $2,500 of qualified expenses for the care of one qualifying person and $3,500 for the care of another qualifying person, you can use the total, $6,000, to figure the credit."

If you paid for two..........

They only paid for the care of one child.

Isn't it then only $3000?

[Burke]

Read further... note David1980 cite in bold quoted from 2441 instructions.

[rtsietsema]

Noted

Noted, thanks for the correction.

[ruthes]

child and dependent care

Doesn't part 2 on the 2441 have you list the child and the expenses pertaining to that child? You would have to put an amount in there. It would have to be the amount actually paid for each child.

[ruthc]

Doesn't the 1st sentence of David1980's response read "If you PAID qualified expenses for the care of TWO or more qualifying persons, the applicable dollar limit is $6,000"? Wouldn't that mean you would have to pay expenses for the 2 not only 1 to get the full credit? Or am I missing the boat? I'm sure the meaning of the rule is to give credit IF you paid for more than one.

[DonB]

I learn something new every day---

per instructions:

To qualify for the credit, you must have one or more
qualifying persons. You should show the expenses for
each child in column (c) of line 2. However, it is possible a
qualifying child could have no expenses and a second
child could have expenses exceeding $3,000. You should
list -0- for the one child and the actual amount for the
second child. The $6,000 limit would still be used to
compute your credit unless you have already excluded or
deducted, in Part III, certain dependent care benefits paid
to you (or on your behalf) by your employer.

[mikeburg]

Thanks for the discussion.

My tax software uses $6,000 even though I enter it all under one dependent.

So if we can't use $6,000, are you saying if they paid someone $1.00 for the 2nd child for qualified child care, then they would qualify for the $6,000?

thanks a bunch, mikeburg

[rtsietsema]

Even zero

Or nothing at all!

[Maribeth]

Oh my . . . . . Definitely learn something new every day. Wow . . . . .