is rental income consider as earned income for form 2441?

Question

Is rental income consider as earned income for childcare credit? My spouse has w2 income and we have some rentals that I manage. we has positive rental income on schedule E even after depreciation, high HOA fees, int, taxes, etc. and since we don't have PM, does rental income can go towards earned income so it meets both spouse working or rental income still consider as passive income.

Thank you in advance for your reply.

Basit Siddiqi · Answer

@Kinjal PatelRental income is not earned income. You may potentially not be eligible for the child and dependent care credit as a result.The only way I can see it changing it to earned income is if you created your own property management company but I wouldn't do that just for the child and dependent care credit.

Anthony Dooley · Answer

Rental income is not earned income. Earned income is on a W2. If you have a PM, they issue a 1099 Misc for rental income. If you don't have a PM, you can enter rental income on turbo tax or with a tax preparer. By entering all of your expenses and depreciation, it will offset the income and lower the taxable amount that you will pay. Rental property is a business. It should be managed as such. Mileage on your car, computer, software, subscriptions, taxes, insurance, HOA fees, repairs, etc. are all deductible expenses that W2 income does not offer.