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New Refundable Child “Care” Tax Credit [REFUNDABLE TAX CREDIT] Dependent Care Expenses Credit (2441) - YouTube
Channel: JJ THE CPA
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jj and cpa here hope you're doing well
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so dependent care expenses in 21
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it's bigger and it's juicier how so in
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21
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you get to count now up to for one
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dependent 8 000
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independent care expenses that's way up
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it's up to for two or more dependents
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it's up to 16 000 that can be included
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for dependent care benefits and the
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percentage that's used to determine the
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credit is up in 21 and it's 50 percent
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so for one dependent you can count up to
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8 000 independent care expenses and at
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50 that's up to a 4 000
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tax credit if you have two or more
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right you're following the math up to 16
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000 independent care benefits 50
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it's a 8 000 tax credit now how do you
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know especially for those that
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don't prepare your own return or you're
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preparing it yourself you're not sure
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did it come out right well there should
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be a form 2441 for starters because
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that's where you indicate who the
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dependents are who the dependent care
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provider was and their information and
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how much was paid to them and then the
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calculation but where the rubber meets
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the road is you would look on your form
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1040
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and you would look in two spots because
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guess what in 21
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potentially the dependent care benefit
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is partially refundable
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so
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you would look on
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uh form 1040 and you would either look
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on line 31 or look on line 20. line 31
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is the refundable amount line 20 is your
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credit just not the refundable amount
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that's on your form 1040.
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the other spot to make sure is that when
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you go from your form 2441 where it's
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calculated those credits carry to
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schedule three
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and on schedule three you look on line
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13g to see the refundable amount and on
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schedule three you would look on line
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two to see the non-refundable amount so
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if you're wanting to just follow the
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calculation form 2441 to schedule three
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to the form 1040 or you can just start
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at the end and go well did i get the
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credit but if you want to make sure it's
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correct here's how you work its way
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backwards so i'm going to give you a
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link to the instructions and the form of
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form 2441 that's really where the rubber
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meets the road and it wrote and how this
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all works and so
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age limit and the mechan
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income limits faqs of the irs are also
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super helpful which i'm going to give
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you a link to but the one thing i'm
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glad you made it to here on is that for
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those that run the dependent care
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benefits through wages through their
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employer
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so on a form w-2 box 10 it's the
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dependent care benefits that were ran
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through that cafeteria plan that planned
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through the employer know this employers
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didn't have to increase the amount that
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you were running through that plan for
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the new increased amounts for 21 meaning
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you may have only run through 5000 for
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one or ten thousand for two
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but you may have very well more
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dependent care expenses
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so be on the lookout for this because in
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the past
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typically what you ran through your
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wages and was in box 10 was pretty much
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what you spent or it was already then
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the max
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you very easily can have more
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than what was ran through the employer
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and then you get in essence this credit
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because you had more expenses so for
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fellow tax pros be sure that we're
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asking because in the past we go well
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did they have them yes okay they already
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ran the max done we're doing the form
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2441 to show that they qualified
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properly and they got it no adjustments
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but it's in the past many times it's
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just a wash for those that have the box
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10 of the form w3 indicating the
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dependent care benefits so don't miss
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out on this any of our clients that
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we're doing returns on they have the box
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10 we always are wanting to verify that
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information verify that they actually
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have those expenses but now
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in addition hey did you have any more
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so most of the time our clients are just
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giving us the documents that then show
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from the dependent care here's what you
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spent here's what it is period they just
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list what it is not what the max is it's
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allowed for irs purposes here's what it
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is so most of our clients we already
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have that
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but be sure especially for that if
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you're paying for these amounts you get
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to account more expenses and the credit
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percentage is greater so don't miss out
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on that all right hey
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i'll put links in the body of this video
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i do cpe check out that as well all
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right hey thanks for tuning in i'd love
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it if you'd subscribe and then don't you
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ever forget you've never met a cpa
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quite like me
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