BlueCo incurs $900,000 during the year to construct a facility that will be used exclusively for the care of its employees' pre-school age children during normal working hours.The credit for employer-provided child care available to BlueCo this year is $225,000.

Question

Quizplus · Accepted Answer

The credit for employer-provided child care facilities is limited to 25% of the qualified expenses, plus 10% of qualified resource and referral expenditures, with an overall limit of $150,000 per year. Therefore, 25% of $900,000 is $225,000, but the credit cannot exceed $150,000.

BlueCo Incurs $900,000 During the Year to Construct a Facility