Wednesday, February 27, 2013

What's wrong with my Child Care Credit?

Question by dol1234: What’s wrong with my Child Care Credit?
Why is that when I enter Child Care Credit $ 8000 that I paid last year for day care on my tax return, the number changes from “I Owe Tax” from $ 2,443 to $ 4,087? I thought it should reduce what I owe but it went the other way. How is this possible? Am I entering this in the wrong place? Thanks.
I’m using Form 2441 to enter my child care expenses. Is this the correct form? Thanks.
He is 2 years old and go to a real day care. I have the Tax Statement that the daycare provided how much we paid for the entire year. I’m using TaxSlayer.com. When I change the daycare deduction from $ 0 to $ 8000, my calculated income increases by $ 5000 automatically. Why does it think my income increases? Any thought? Thanks for your help.
Oh.. forgot. I also have $ 5000 FSA last year.

Best answer:

Answer by rebel g
The child care credit and child care expenses are two different things.
You need to fill out the child care credit worksheet using the amount you paid. After you follow all of the steps on the worksheet, you will have a correct amount to put on your return.

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What's wrong with my Child Care Credit?

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