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Hoping someone can help...

I have just e-filed using TurboTax and it was rejected - but not with an error message. Here is the situation.

Two children - DS1 and DS2. Both have child care. I ALSO have a flexible spending account that allows me to put aside up to $5K pre-tax for the two kids to pay dependent care expenses. This is about the Child Care Credit.

The error message was essentially that I have more than two child care providers listed, so that I CANNOT e-file, but MUST file by mail. Nowhere on the IRS website or anywhere else can I find documentation about that.

Here's the situation:
DS1:
- Had a before/after school provider at one school Jan-June
- Went to summer day camp (same as his brother)
- Had a before/after school provider at new school Sep-Dec

DS2:
- Went to employer onsite daycare Jan-June (which was an onsite, separate provider, not daycare "provided by" my employer)
- Went to a summer day camp (same as his brother)
- Went to a before/after school provider at new public school Sep-Dec (same tax ID as his brother's new school as well).

So I have five "providers" according to TurboTax:

- My "dependent care benefits" box on my W2 (the $5K account)
- The summer day camp for both boys
- The before/after school provider for both boys Sep-Dec
- The onsite daycare for DS2 Jan-June
- The before/after school provider for DS1 Jan-June

The cap is $6000 for the two boys combined, and does not have to be "equal" (i.e. I could have $4K for one boy and $2K for the other).

I cannot double-use the $5,000 (I would need to have a TOTAL of $11K to fully qualify for the child care credit).

I have a total of over $18K in child care, so I have $13K even after the $5K.

QUESTIONS TO BE ANSWERED:

- What's up with the "must file by mail with >2 providers?" I cannot find this documented ANYWHERE.

- If I backed the $5K out of the onsite daycare, should I have done that?

- Am I going to trigger some issue if I try to re-e-file?

I'm really concerned about this, and DID NOT WANT TO FILE BY MAIL.

Alternatively, can I simply not claim the child care credit and remove all that piece from my tax return? If I do, will I cause issues with the $5K of pre-tax?

GSF
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What's up with the "must file by mail with >2 providers?" I cannot find this documented ANYWHERE.

Yes you can find documentation. TT is telling you so.

It's major deep breath time. There was a time when no one e-filed, and yet taxes got paid. Not being able to e-file doesn't mean there's something wrong. It just means you can't e-file.

- If I backed the $5K out of the onsite daycare, should I have done that?

I'm not sure what you're asking here, but I'm pretty sure the answer is "no." There's no fudging necessary to complete the 2441.

- Am I going to trigger some issue if I try to re-e-file?

Only another e-file failure, and given your reaction to this one I wouldn't recommend it.

Alternatively, can I simply not claim the child care credit and remove all that piece from my tax return? If I do, will I cause issues with the $5K of pre-tax?

In order, no and yes. You account for that $5,000 on Form 2441. If you don't, you have to add it back to your income.

It sounds like you should wind up with a credit equal to the applicable percentage for your income times $1,000. If you don't, if you post the numbers from the 2441 maybe we can figure out where you went wrong.

Phil
Rule Your Retirement Home Fool
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It sounds like you should wind up with a credit equal to the applicable percentage for your income times $1,000. If you don't, if you post the numbers from the 2441 maybe we can figure out where you went wrong.

I found the documentation for the 2441. Which doesn't help me, to be honest:

http://www.irs.gov/efile/article/0,,id=185776,00.html

However, the problem seems to be that I also wouldn't know how to fill out the Form 2441 longhand either, since it only provides SPACES for two providers. I didn't have just two providers. Especially since I had two kids, with 2-3 providers each.

I cannot be the only person with this problem. But I'm rather aggravated with the issue.

What I'd LIKE is to get the full credit, with the providers down to two.

I paid a total of $8090 for the two kids for summer camp.

I paid $6147 for DS2 alone for daycare.

So those two numbers: $8090 + $6147 = $14237

$14237 - $5000 of money I had in the fund (and therefore can't count) = $9237.

If I have the $9237 and I'm capped at $6,000 for the $200 credit, (which I am), then all I really need is the TWO daycare providers, rather than the others.

Of course, my problem is that TT seems to be counting the $5,000 fund as another PROVIDER, which is not the case.

However, is it legal for me to only claim the daycare and the summer day camp (not sleep-away, day camp) on there and not the before/after care?

I just would like to do this legally and in a way that will not trigger massive amounts of paperwork and/or a huge delay in filing (which this would).

I have nothing to hide, I have extremely straightforward taxes, but there's a big difference between a 7-day e-file return and a 6-8 week paper file return - especially as there are currently delays anyway, so that could turn into months and months.

GSF
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However, the problem seems to be that I also wouldn't know how to fill out the Form 2441 longhand either, since it only provides SPACES for two providers. I didn't have just two providers. Especially since I had two kids, with 2-3 providers each.

I cannot be the only person with this problem. But I'm rather aggravated with the issue.


No doubt, which is why the instructions for the Form tell you what to do when there are more than two providers: attach a statement with the needed information for the other providers. And that's why you can't e-file with more than two providers.

What I'd LIKE is to get the full credit, with the providers down to two.

If you can get to $6,000 of expenses with only two providers, do it. The only things you have to accomplish on the 2441 are:

1. Account for the $5,000; and
2. Show an additional $1,000 of allowable expenses.

Beyond that there's no purpose for the additional information.

Phil
Rule Your Retirement Home Fool
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