Sean and Jenny are married,file a joint return and have two dependent children,Blake,age 9 and Jake,age 5.Sean has earned income of $72,000.Jenny was a full-time student for nine months)with no income.They paid a qualified day care center $7,000.What amount of child and dependent care credit can Sean and Jenny receive?

Question

Quizplus · Accepted Answer

To calculate the credit, we need to determine the eligible expenses. The $7,000 paid to the qualified day care center for the care of their children qualifies for the credit. The maximum amount of eligible expenses for two or more children is $6,000, and the credit is calculated as a percentage of the eligible expenses based on the taxpayer's adjusted gross income.

In this case, Sean and Jenny have two children, so the maximum eligible expenses are $6,000. Since Sean's earned income is $72,000 and Jenny had no income, their adjusted gross income is $72,000.

The percentage of expenses that they can claim is 20%, so the child and dependent care credit is calculated as:

$6,000 x 20% = $1,200

Therefore, the answer is (C) $900.

Sean and Jenny Are Married,file a Joint Return and Have