Dane is a single father with two dependent children,Elle,age 7 and Eva,age 5.He has AGI of $61,000 and paid $6,100 to a qualified day care center for the two children.What amount of child and dependent care credit can Dane receive this year?
A)$600.
B)$1,000.
C)$1,200.
D)$1,220.

Question

Quizplus · Accepted Answer

The child and dependent care credit is calculated as a percentage of the expenses paid for the care of a qualifying individual. For an AGI of $61,000, the percentage is 20%. Therefore, the credit is 20% of $6,100, which equals $1,220. However, the maximum allowable expenses for two children is $6,000, so the credit is 20% of $6,000, which is $1,200.

Dane Is a Single Father with Two Dependent Children,Elle,age 7