How does ProConnect Tax calculate line 3?
If your client received any dependent care benefits, ProConnect Tax will complete Part III of Form 2441 to determine how much of the care expenses were already covered by deductible or excluded benefits, and can't be used to calculate the credit.
Dependent care benefits from partnership or sole proprietorship are not flowing to the 2441
Dependent care benefits you enter on Schedule K-1, Schedule C, or Schedule F must also be entered on Input Return ⮕ Credits ⮕ Dependent Care Credit (2441), under the General Information section in the top right corner, in the field labeled Sole proprietorship or partnership. This allows the program to calculate the amount of benefits that are deductible or taxable for purposes of the credit. Once the credit is calculated, you may need to adjust your inputs on Schedule K-1, C, or F to report only the amount of benefits that were deductible.
Claiming the Dependent Care Credit in a married filing separate return with dependent care expenses:
When a taxpayer is filing MFS and has dependent care expenses, there are certain requirements that must be met to be able to take the credit. The taxpayer would be "treated as unmarried."
To exclude the dependent care benefits from the return:
- Go to Input Return ⮕ Credits ⮕ Dependent Care Credit (2441)
- Click on the General Information button in the top right.
- Enter 1 in, 1 = married filing separate and treated as unmarried