Your Life

Your Life

Major life milestones often have a major tax impact. Changes in your marital status, having a baby or adopting a child can have significant impact on your taxes. This is the place to ask questions about dependents, real estate, and other various scenarios that play a significant role in what taxes you pay.

Reply
Pioneer
Posts: 2
Registered: ‎02-07-2018

Error With Dependent Care Credit

I am Preparing my own Taxes

Income is about 7000 credit of 1552
Ed credit is AOG 1000
Child tax credit is only 225

Error is :
Income limitations apply to the dependent care expenses that you claimed. Your tentative credit is 1050. The amount allowed is 0.
Highlighted
Associate (Pioneer)
Posts: 72
Registered: ‎11-25-2014

Re: Error With Dependent Care Credit

Hello,   The amount of income tax you are responsible for is determined on what income is left to tax after taking the standard deduction and personal exemptions.  With an income of 7000, they will allow you to subtract 6,350 for single filing status, and then 4050 for each of you on the return.  You must have a child on the return to generate the credits you are getting.  So, when you take 6,350 and 8100 (4,050for each of you) from 7,000, you have no income left to tax.  The dependent care credit can only reduce the amount of income tax they state (tax on 0) to zero.  The error is telling you that with what you paid for daycare, the credit could be worth 1,050, however, you would have to have a tax amount equal to 1,050 to receive it.  It is what is known as "non refundable".  Sorry, it won't work out for your then.  Is this error stopping you from filing?  I think it is just an informational error.  Hope this helps.