Max and Alexandra are married and incur $5,500 of qualifying expenses to care for their two children,ages 2 and 5.Max's earned income is $35,000 and Alexandra's earnings from a part-time job are $5,000.What is the amount of the qualifying expenses for purposes of computing the child and dependent care credit?
A)$3,000
B)$5,000
C)$5,500
D)$6,000

Question

Quizplus · Accepted Answer

The qualifying expenses for the child and dependent care credit are limited to the lesser of the actual expenses incurred ($5,500) or the earned income of the lower-earning spouse ($5,000). Therefore, the qualifying expenses are $5,000.

Max and Alexandra Are Married and Incur $5,500 of Qualifying