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?

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