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

[brien-gregan]

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?

[sjrcpa]

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.

[brien-gregan]

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

[TaxGuyBill]

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.

[brien-gregan]

Not undoing employer side.  When zero dependent care expenses, dependent care benefits are added to line 1 of 1040.  It could make sense for some taxpayers to pay taxes (add to line 1 form 1040) on the DCB to use money for tax credit.

[TaxGuyBill]

As stated above, it is not an election.  It becomes taxable if there are not expenses, but you do have expenses.  Again, it is not an election.

[BobKamman]

If we all say "it's not an election" three times while clicking our heels, maybe that's the right answer.  I think it's an interesting question.  Do some more research and let us know what you find.  

[abctax55]

@brien-gregan  "...Is there an input in lacerte"

Generally, there isn't input for something that isn't legal.   No expenses, NO credit.