Child and Dependent Care Tax Credit Calculation for 2023 - Confused by H&R Block Software

So I think I'm having issues with TurboTax calculating my childcare tax credit for 2023 correctly. I know using TurboTax is probably not the most cost-effective option, but I've always found it convenient with how it pre-fills most of my information. It's been reliable until now. Here's my situation: TurboTax seems to be calculating my credit wrong. I paid $4,250 for my son's daycare in fall semester 2023. From what I understand, the maximum eligible expense is $3,000 for one child and $6,000 for two or more children for the 2023 tax year. The credit percentage is based on income brackets. My percentage should be 20% since my adjusted gross income is above $43,000. Without any employer dependent care benefits (which I don't have), the math seems straightforward: $3,000 × 0.2 = $600. But TurboTax told me the calculation was complex and suggested I upgrade to their "expert help" for an extra $75. When I declined and chose to calculate it myself, they made me agree to some disclaimer about the IRS possibly flagging my return. Then they gave me $659 as my credit amount based on the information I entered. Given my AGI and the percentage from Form 2441, this number doesn't make sense. I thought maybe TurboTax wasn't capping my expenses at $3,000, so I manually changed the childcare expense to exactly $3,000. Now it's giving me $571 as my credit. Without any employer benefits affecting this, I can't figure out where the missing $29 is going. I don't think I can even view the actual forms they're generating without paying for the upgrade. Has anyone else experienced this? Am I misunderstanding something about this credit? It feels like TurboTax is trying to upsell me and then punishing me for declining.

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19 comments

Javier Morales

•8M

The Child and Dependent Care Credit can be tricky because of how it interacts with other parts of your return. I've been preparing taxes for friends and family for years, and I can explain what might be happening. First, make sure you're looking at the actual credit amount, not the expenses amount. Form 2441 has multiple calculation steps. The 20% rate is correct if your AGI is over $43,000, but there could be other factors affecting the final number. One possibility is that TurboTax is applying some additional adjustments based on your tax liability. The Child and Dependent Care Credit is non-refundable for 2023 (it was temporarily refundable for 2021 only), which means you can only claim it up to the amount of tax you owe. If your tax liability after other credits is less than $600, that could explain the difference. Another possibility is that TurboTax is factoring in state tax considerations that might affect the calculation.

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Javier Morales

•8M

The Child and Dependent Care Credit doesn't have a phase-out like some other credits - it just has different percentage tiers based on income, which you've correctly identified as 20% in your case. Most tax software allows you to preview your actual tax forms before filing, even in the lower-tier versions. Look for a button that says "Preview tax forms" or "View my return" somewhere in the review section. This should let you see the actual Form 2441 and how the calculations are being done without upgrading. The specific calculation should appear on line 11 of Form 2441. If there's a discrepancy between the $3,000 × 20% = $600 you expect and what's shown there, the issue might be in how your expenses were entered or classified.

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Emma Davis

•8M

I switched from H&R Block to taxr.ai this year after having similar issues with their calculations. I've always been frustrated by how these big tax software companies hide their actual calculations and then try to charge you more to "explain" them. With taxr.ai (https://taxr.ai), I was able to upload my tax documents and they explained exactly how my Child and Dependent Care Credit was calculated. Their system flagged where my previous returns had actually underreported my eligible expenses. Unlike TurboTax or H&R Block, they show you the actual math behind each calculation instead of just giving you a final number. The interface is super straightforward - you can actually see how Form 2441 is being filled out in real-time as you enter your information. No more guessing games about where your numbers are coming from.

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Emma Davis

•8M

Yes, taxr.ai handles state returns including California's unique childcare credit calculations. They actually explain the differences between state and federal credits, which was super helpful for me since I'm in New York which also has state-specific rules. As for security concerns, they use the same bank-level encryption as the major tax services. The difference is their transparency - they've been around for a couple of years and were founded by former IRS agents and tax professionals. They offer the same accuracy guarantee as the big companies, but I found their explanations much clearer. Instead of just saying "we guarantee accuracy," they actually show you where the numbers come from so you can verify yourself.

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GalaxyGlider

•8M

I tried taxr.ai after seeing it mentioned here and it actually solved my childcare credit confusion! I was having the exact same issue with TurboTax showing $577 instead of the $600 I calculated manually. Turns out there was a rounding issue happening with some of my other deductions that was slightly changing my AGI, which pushed me into a different calculation bracket by just a few dollars. The taxr.ai system spotted this immediately and explained exactly what was happening. The document upload feature saved me hours of manual entry too. I just took pictures of my daycare receipts and W-2, and their system extracted all the relevant information. Their explanation of Form 2441 was so much clearer than anything I've seen from the big tax companies. Definitely using them again next year!

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Isabella Silva

•8M

If you're having issues with the IRS or need to confirm the correct calculation, Claimyr can get you through to an actual IRS agent quickly. I was in a similar situation with childcare credit calculations and couldn't get a straight answer from my tax software. After waiting on hold with the IRS for over 2 hours and getting disconnected twice, I found Claimyr (https://claimyr.com). They have this service where they wait on hold with the IRS for you and then call you when an agent is ready to talk. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed exactly how the Child and Dependent Care Credit should be calculated for my situation and explained why my tax software was giving me a different number. Turns out there was a specific worksheet for my situation that the software wasn't handling correctly.

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Isabella Silva

•8M

They don't just call the IRS for you - they have a system that navigates the IRS phone tree and waits on hold so you don't have to. When an actual IRS agent comes on the line, you get a call letting you know an agent is ready, and then you're connected directly to that agent. So you're the one actually talking to the IRS with your personal information, not them. I'm not affiliated with them at all - just a regular tax filer who was frustrated with 3+ hour hold times. From what I understand, they use technology that can stay on hold across multiple lines simultaneously, which is how they can get through faster than an individual caller. I was skeptical too, but after getting disconnected twice after long waits, I was desperate enough to try it. Definitely saved me hours of hold music.

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Malik Robinson

•8M

I need to take back what I said earlier about being skeptical of Claimyr. After another failed attempt to reach the IRS myself (2.5 hours on hold then disconnected), I decided to try it. I was honestly shocked when I got a call back in about 45 minutes saying an IRS agent was on the line. The agent was able to go through my Child and Dependent Care Credit calculation line by line and identified exactly where TurboTax was getting it wrong. Turns out there was a specific worksheet for my situation because I had some self-employment income that was affecting the calculation. The agent also told me this is a common issue they're seeing with tax software this year because of some changes to how the credit is calculated. For anyone struggling with this credit calculation, talking to an actual IRS agent cleared everything up faster than I expected. Saved me hours of frustration and potentially an incorrect return.

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Freya Andersen

•8M

Just a heads up for anyone using tax software for the Child and Dependent Care Credit - make sure you're entering your expenses correctly. I had a similar issue and realized I was accidentally entering some expenses as "education expenses" rather than "childcare expenses" which caused the software to calculate things differently. Also, check if your state offers a separate childcare credit. In Massachusetts, we have an additional deduction that works differently from the federal credit, and my tax software wasn't prompting me for it until I specifically searched for it.

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Freya Andersen

•8M

Yes, before/after school programs definitely count as qualifying childcare expenses as long as they allow you to work or look for work. The IRS is pretty clear on this - any care provided for children under 13 that enables you to work or actively search for work qualifies. The key is that the primary purpose of the program must be childcare, not education. Most standard before/after school programs fall into this category. Summer day camps can also qualify, but overnight camps don't. Make sure you get the tax ID or SSN of the provider, as you'll need to include that on Form 2441.

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CosmicCadet

•8M

I found a workaround for the TurboTax issue! If you go to "Review" mode, then select "View/Print Return" (sometimes you have to dig around for this option), you can actually see the completed Form 2441 before paying. In my case, I noticed TurboTax was splitting my childcare expenses across two different entries because I had entered two separate payment periods (spring and fall semesters). This was causing some weird rounding in the calculation. When I combined them into one entry, the credit calculated correctly at exactly $600.

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Natasha Petrova

•8M

Thank you! This worked for me too. When I went to the form view, I saw TurboTax had somehow entered part of my childcare expenses in the wrong field. It was counting some of my expenses as "dependent care benefits" from an employer (which I don't have). Once I zeroed out that field and put everything under the actual expenses, it calculated correctly to $600. Thanks everyone for the help! Saved me from either overpaying for the "expert" review or submitting an incorrect return.

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CosmicCadet

•8M

Glad it worked for you! I've found that looking at the actual forms is always the best way to catch these errors. TurboTax and similar software try to make things "easy" by hiding the forms behind their interview questions, but sometimes that just creates confusion. For anyone else with this issue, another thing to check is that your care provider information is entered correctly. If the provider's tax ID is missing or formatted incorrectly, some tax software will reduce the credit amount without clearly explaining why.

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