Tuan and Marisa are married,file a joint return,and have two dependent children,Zack,age 6 and Aaron,age 5.Tuan has earned income of $72,000.Marisa was a full- time student (for nine months)with no income.They paid a qualified day care center $5,000.How much is Tuan and Marisa's child and dependent care credit for the year?
A)$600.
B)$900.
C)$1,000.
D)$1,200.

Question

Quizplus · Accepted Answer

The child and dependent care credit for Tuan and Marisa would be $900. This is calculated based on their expenses for child care, which allows them to work or, in Marisa's case, attend school full-time. The maximum expense allowed for two or more dependents is $6,000, but they only spent $5,000. The credit is 20% of the allowable expenses, so 20% of $5,000 is $1,000. However, since their AGI (Adjusted Gross Income) is over $43,000, the credit percentage decreases to 20%, making the credit $900 (20% of $5,000).

Tuan and Marisa Are Married,file a Joint Return,and Have Two