Child and Dependent Care Expenses

[jmallard]

I have a client recently divorced, filing as HOH. There were two children, Husband and ex-spouse each claim one. My client's son is 15 years old but he is disabled. I don't know for sure if the son is considered Totally Disabled, but his disability is permanent and I know that he can't be left alone, attends special school and day care after that. This child will never be able to drive a car or hold a job. He will require physical care for the rest of his life. He gets about $5000.00 per year in non taxable interest and $4000.00 in ordinary qualified dividends, from a trust fund and gets a Schedule K-1. I file a 1040 for him (child) with the K-1 information and indicate that he is claimed as a dependent on his father's tax return. Doctors screwed up an operation in 2001 that left him in present condition - that's where the trust fund comes from.

My question comes from the fact that I get a Warning from ATX software that "Dependent care expenses are being claimed for someone over age 13". I checked and do not get this warning in the 2006 Tax Year software, he was 14 last year. Is this something new? Can he still be claimed as a qualifying child for Child Care Expenses?

I created and e-file (not submitted) and the Warning changes to "Informational".

Any help would be appreciated.

Jerry

[TAXBILLY]

Did you check that he was disabled on the dependent sheet?

taxbilly

[jmallard]

Did you check that he was disabled on the dependent sheet?

taxbilly

TAXBILLY,

Yes, I checked that he was disabled on the dependent sheet.

Jerry

[TAXBILLY]

The warning is in blue so it's not a show stopper. It's just making you aware of the over 13 rule which doesn't apply to a disabled dependent. In fact, if you look at the instructions for 2441, you will see you can take child care up to the the child's birthday even if he turned 13.

taxbilly

[jmallard]

Taxbilly,

Thanks for the info.

I'm trying to make sure I don't get my client into trouble down the road and to get confirmation from other tax professionals for my own peace of mind.

The way I read the instructions on the 2441, if the qualified person is disabled and unable to care for himself, there is no age limit on taking "Dependent Care Expenses"?

Jerry