Trudy is Jocelyn's friend. Trudy looks after Jocelyn's four-year-old son during the day so Jocelyn can go to work. During the year, Jocelyn paid Trudy $4,000 to care for her son. What is the amount of Jocelyn's child and dependent care credit if her AGI for the year was $30,000?

Question

Quizplus · Accepted Answer

The child and dependent care credit is a tax credit that helps offset the cost of child care expenses. The maximum amount of the credit is $1,080 for one qualifying child and $2,160 for two or more qualifying children. To qualify for the credit, the taxpayer must meet certain requirements, including having a qualifying child, paying for child care expenses, and having earned income. In this case, Jocelyn meets all of the requirements. Her son is a qualifying child, she paid Trudy $4,000 to care for her son, and she had earned income of $30,000. Therefore, Jocelyn is eligible for the child and dependent care credit in the amount of $1,080.

Trudy Is Jocelyn's Friend