If you had qualified child or dependent care expenses in 2025 but didn't pay them until 2026, you may be able to increase your 2026 Child and Dependent Care Credit.
These situations are reported on Form 2441 and often involve dependent care benefits provided by an employer, such as a flexible spending account (FSA).
What Are Delayed Payments?
Delayed payments are qualified child care expenses that:
- Were incurred during 2025, but
- Weren't paid until 2026
In some cases, these expenses can affect the amount of Child and Dependent Care Credit you're eligible to claim on your 2026 return.
What Are Forfeited Amounts?
A forfeited amount is money that was available through a dependent care benefit plan but wasn't used because you didn't incur enough qualifying expenses.
For example:
- You elected dependent care benefits through your employer.
- You didn't have enough qualifying expenses to use the entire amount.
- The unused funds were forfeited under your employer's plan rules.
You should also include amounts that your employer allowed you to carry forward into the following year.
Why Does This Matter?
The IRS allows certain delayed or forfeited dependent care benefit amounts to be considered when calculating your Child and Dependent Care Credit. This can increase the credit available on your return if all eligibility requirements are met.
Our software will perform the necessary calculations automatically based on the information you enter.
How Do I Enter Delayed or Forfeited Child Care Payments?
To enter this information in the software:
- Go to Federal.
- Choose Deductions - Select My Forms
- Click on Credits
- Select Child and Dependent Care Credit (Form 2441).
- Answer Yes to the question: "Did you pay any care expenses for 2025 in 2026?"
The program will use your response to determine whether any delayed payment rules apply and calculate the credit accordingly.
Keep Good Records
If you're claiming delayed child care expenses or reporting forfeited dependent care benefits, keep documentation that shows:
- When the care was provided
- When the expenses were paid
- Any dependent care benefits received through your employer
- Any amounts forfeited or carried forward
Having complete records can help support your claim if the IRS requests additional information later.