Clark, a widower, maintains a household for himself and his two dependent preschool children. For the year ended December 31, 2019, Clark earned a salary of $32,000. He paid $3,600 to a housekeeper to care for his children in his home, and also paid $1,500 to a kiddie play camp for child care. He had no other income or expenses during 2019. Before considering any limitation due to tax liability, how much can Clark claim as a child and dependent care credit in 2019?

Question

Quizplus · Accepted Answer

Clark can claim a child and dependent care credit up to 35% of his qualifying expenses, limited to $3,000 for one child or dependent and $6,000 for two or more children or dependents. In this case, Clark paid a total of $5,100 in qualifying expenses ($3,600 to the housekeeper + $1,500 to the kiddie play camp). Since Clark has two dependent children, his maximum credit is limited to $2,100 (35% of $6,000). Therefore, Clark can claim a child and dependent care credit of $1,326 ($2,100 x 63.14%).

Clark, a Widower, Maintains a Household for Himself and His