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Level 2
January 5, 2022
Question

not excluding dependent care expenses from income and taking dependent care credit instead (2021)

  • January 5, 2022
  • 1 reply
  • 4 views

For 2021 the dependent care credit is much larger.  Can a taxpayer elect to pay taxes on the dependent care benefits from employer to use the income for the tax credit, instead of excluding the income?

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1 reply

sjrcpa
Level 15
January 5, 2022

It's not an election. But if they don't fill out the part of the 2441 showing how they spent the DCB it would be taxable.

The more I know the more I don’t know.
Level 2
January 5, 2022

Yes not election, but in lieu of excluding,  including dependent care benefit in taxable income to claim more credit.  Is there an input in lacerte

Level 15
January 5, 2022

The employer excluded the income through their policy/plan.  You can't undo the employer's policies/plans by anything you do on the 1040.