New other dependents credit

[sshorter]

I am trying to take the deduction for other dependents. I cannot find a way for the ProSeries Basic to take this deduction.

Earned income from S-Corp makes it difficult for small entrepreneurs to use this deduction.

This is a new law but the tax forms are not friendly to this deduction.

This is for a dependent son 30 years old.

I have income from profits in an S-corp plus w-2 income which totals 14,300

According to IRS pub 972, in order to take this deduction, K-1 income should go on schedule SE, but I know not where.

- form 8812 has a box to enter self employment income to qualify for this deduction (box 6a)

- entries on schedule SE lead the program to automatically add tax for self employment which is wrong
for s-corp pass-through income and w-2 income
(total tax without including the SE form is zero)

- schedule 8812, line 6a will only accept data from EIC worksheet (not the SE form per IRS 972 instructions)
if I try to override the amount it is a big red flag
The EIC worksheet does not work for this calculation because there is pass-through income which disqualifies EIC credit

- schedule 8812, line 4, requires child dependents under the age of 17 to take the deduction,
which disqualifies the "other dependent" option unless there are additional younger children in the household.
This would make the entire provision for "other dependents" null and void and the new credit impossible to use.

What am I missing?

[taxiowa · Accepted solution]

The ODC is not a refundable credit.  At $14,300 your client probably owes no tax so hence no $500 tax credit.

[Mt-Juliet--CPA]

Based upon your income level it most likey would not be refundable