Rodrigo and Gwen are married and have 2 children. Gwen earns $65,000, and Rodrigo has a part-time job from which he earns $4,000 during the year. They pay $6,000 in qualified child-care expenses during the year. Rodrigo and Gwen can claim a child-care credit of:

Question

Quizplus · Accepted Answer

The child-care credit is a percentage of qualified expenses, which are capped at $3,000 for one child and $6,000 for two or more children. Given their income level, Rodrigo and Gwen would qualify for a 20% credit on up to $6,000 of expenses, which amounts to $1,200. However, because Rodrigo's income is $4,000, the credit cannot exceed his earned income, making the maximum credit they can claim $800.

Rodrigo and Gwen Are Married and Have 2 Children