Lennie and Margo spent $2,800 for child care for their 7-year-old son. Lennie's earned income was $41,000, Margo's earned income was $24,800, and the AGI on their joint return was $71,200. Calculate their dependent care credit.

Question

Quizplus · Accepted Answer

The dependent care credit for taxpayers is a percentage of their qualified expenses, which in this case is $2,800. The maximum expense allowed for one qualifying person is $3,000. Since their AGI is $71,200, their credit percentage is 20%. Therefore, their credit is 20% of $2,800, which equals $560.

Lennie and Margo Spent $2,800 for Child Care for Their