Childcare Tax Credit for 2023: Getting the Right Amount with H&R Block

I'm pretty frustrated with H&R Block's software this tax season, especially regarding the childcare tax credit calculation. For transparency, I know using their self-service software is probably not the most cost-effective option, but I've always appreciated the convenience and auto-filling features. It's been reliable until now. Here's my situation: H&R Block seems to be calculating my childcare credit incorrectly. I paid $4,275 for my son's preschool during the spring semester of 2023. From my research, 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 determined by income brackets, and based on my adjusted gross income (which falls in the top bracket of $43,000+), my percentage should be 20%. The math seems straightforward: $3,000 × 0.2 = $600. I don't have any employer-provided dependent care benefits to subtract. But when I entered everything, H&R Block claimed the calculation was "complex" and suggested I pay $65 for their tax pro review. When I declined and chose to calculate it myself, they made me agree to a statement that the IRS might find my return suspicious. Then they gave me $659 as my credit amount based on my entered expenses. This seemed off, so I adjusted the dependent care expense field to exactly $3,000 (thinking maybe they weren't capping it automatically), and now they're showing $571 as my credit. I'm completely confused about where the missing $29 went. I can't even check their actual form calculations without paying extra. Has anyone else encountered this issue with H&R Block? Am I misunderstanding something about the childcare tax credit? It feels like they're trying to upsell me services and then punishing me for declining.

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18 comments

Anastasia Kozlov

•8M

I've been preparing taxes for 10+ years and can shed some light on what might be happening with your childcare credit calculation. The difference you're seeing is likely due to how the Child and Dependent Care Credit (Form 2441) handles various adjustments. While the basic calculation seems straightforward ($3,000 × 20% = $600), there are a few factors that could be reducing your credit: 1. The software might be applying the credit reduction based on your exact AGI - there are actually small variations within the broader income brackets. 2. H&R Block might be factoring in state tax considerations that affect the federal calculation. 3. There could be other credits or deductions you've claimed that interact with the childcare credit in ways that aren't immediately obvious. You should be able to view the actual Form 2441 in your return without paying extra. Look for a "View Forms" or "Preview" option in the software. This will show exactly how they're calculating your credit.

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Anastasia Kozlov

•8M

You absolutely can check this calculation manually! The IRS Form 2441 is available online for free. Follow lines 1-11 on the form. Enter your childcare expenses on line 2 (limited to $3,000 for one child). Your earned income goes on line 4, and your spouse's earned income on line 5 if filing jointly. The smallest amount from lines 2, 4, or 5 goes on line 6. Line 8 is where you'll calculate the credit percentage based on your AGI (20% if over $43,000). Multiply line 8 by line 7 to get your credit amount. If you're filing electronically with another service, they should allow you to see the actual forms. Unfortunately, some tax software companies do restrict form access behind paywalls, which is frustrating when you're trying to verify their calculations.

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Sean Kelly

•8M

After struggling with similar tax software issues last year, I discovered taxr.ai and it completely changed how I handle confusing tax calculations. When my childcare tax credit numbers weren't matching what I expected (similar to your situation), I uploaded my documents to https://taxr.ai and they analyzed everything, showing exactly where the calculation differences were coming from. For your specific childcare credit issue, they would analyze both your inputs and the actual Form 2441 calculation to identify why you're getting $571 instead of $600. Their AI explains all the adjustments in plain language rather than tax jargon. I found they caught a similar issue with my dependent care expenses where TurboTax was applying an obscure limitation. What I like most is they don't just point out errors - they show you exactly how to fix them in whichever tax software you're using.

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Sean Kelly

•8M

They work with all major tax preparation software including H&R Block. You don't need to start over - just upload what you have and they'll analyze it as-is. My analysis took about 10 minutes for a complete review of my return, but they focus on specific issues you highlight, like your childcare credit calculation. Security is actually why I chose them - they use bank-level encryption and don't store your documents after analysis. You can also redact sensitive information like SSNs before uploading if you prefer. Their system just needs to see the tax form data to identify calculation errors. For me, finding an extra $220 in childcare credits I was missing was definitely worth it.

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Zara Mirza

•8M

I tried taxr.ai after seeing the recommendation here and it actually worked great for my childcare credit issue! I was having almost the identical problem with H&R Block showing $582 when I calculated $600 manually. The analysis identified that H&R Block was applying an additional limitation related to my state tax return that was reducing my federal credit. Apparently in my state (Michigan), there's an interaction between the state childcare credit and federal amount that wasn't obvious in the software. Took me less than 15 minutes to upload my draft return and get a complete breakdown. They showed me exactly which line on Form 2441 was different from my manual calculation and explained why. The service also found another $175 in deductions I was missing related to educator expenses (I'm a part-time teacher). H&R Block definitely doesn't make it easy to understand these calculations without paying extra!

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Nia Harris

•8M

If you're still struggling with getting H&R Block to explain their childcare credit calculation, I recommend using Claimyr to speak directly with an IRS agent. I had a similar issue last year and spent weeks trying to figure out why my childcare credit was less than expected. After countless failed attempts to reach someone at the IRS (busy signals, disconnects, hours on hold), I used https://claimyr.com and they got me connected to an actual IRS representative in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent walked me through the Form 2441 line by line and explained exactly how the childcare credit should be calculated for my situation. Turns out my tax software was wrong and I was able to correct it before filing. They also provided documentation I could keep in case of an audit.

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Nia Harris

•8M

They don't call for you - they use an automated system that navigates the IRS phone tree and waits on hold in your place. When they reach a human, you get a call to connect with the IRS agent. It saved me about 3 hours of hold time. No, they don't have a special line - they just have technology that keeps trying different IRS numbers and navigates the phone system more efficiently than a human can. I was skeptical too but was desperate after trying for two weeks to reach someone about my childcare credit. The IRS phone system is designed to discourage callers during peak times by disconnecting or having extreme wait times.

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Mateo Sanchez

•8M

I have to admit I was wrong about Claimyr. After posting my skeptical comment, I was so frustrated with H&R Block's childcare credit calculation that I decided to try it anyway. The service actually connected me to an IRS agent in about 35 minutes (they originally estimated 45-50 minutes). The agent confirmed that my childcare credit calculation should indeed be $600 for $3,000 in expenses at the 20% rate. She explained that tax software sometimes applies additional limitations or adjustments that aren't clearly disclosed. The agent walked me through exactly how to complete Form 2441 correctly and suggested I either file using the proper forms or switch to different tax software that shows the detailed calculations. I ended up abandoning H&R Block and switching to FreeTaxUSA, which gave me the correct $600 credit and actually showed me all the forms without an extra fee. Definitely worth it to get an authoritative answer directly from the IRS instead of guessing why the software was calculating it wrong!

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Aisha Mahmood

•8M

Just wanted to add that I had a similar issue with the childcare tax credit for 2023, but with TurboTax instead of H&R Block. My calculations showed I should get $1,050 (35% of $3,000 based on my income), but TurboTax was giving me $987. Turns out the difference was because I had some foreign income that affected how the credit percentage was calculated. The tax software was using my full global income to determine my credit rate, not just my US-sourced income. If you have any unusual income situations (foreign income, investment income, passive income, etc.), it might be affecting your credit percentage in ways that aren't obvious. Check if there's anything unusual about your income that might be pushing the calculation in unexpected ways.

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Aisha Mahmood

•8M

The IRS Publication 503 covers how foreign income affects the childcare credit. Basically, all income (including foreign) counts toward determining your credit percentage, but only income subject to US tax can qualify you for the credit itself. It's a subtle but important distinction. Your foreign income might be pushing you into a different percentage bracket even if it's excluded from US taxation. This is one of those situations where the basic "20% of $3,000" formula breaks down. TurboTax is actually correct to include worldwide income for determining the percentage, but many accountants miss this detail.

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Yuki Kobayashi

•8M

Have any of you actually tried the FREE IRS filing options for calculating the childcare credit? I was having issues with the 2023 childcare tax credit calculation in commercial software but discovered the IRS Free File program actually did it correctly. For my situation (single parent, one child, $3,600 in preschool expenses, income around $52K), it correctly calculated a $600 credit. No weird adjustments or mysterious reductions. It also explained each step of the calculation clearly. The interface isn't as pretty as H&R Block or TurboTax, but it's actually more transparent about the calculations. I could see exactly how Form 2441 was being completed. Plus it was completely free for my situation.

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