Question

Clarita is a single taxpayer with two dependent children, ages 10 and 12. Clarita pays $3,000 in qualified child care expenses during the year.

TABLE 6.1

CHILD AND DEPENDENT CARE CREDIT PERCENTAGES

Adjusted Gross Income				Applicable Percentage
Over		But Not Over
$0	–	$15,000		35%
15,000	–	17,000		34%
17,000	–	19,000		33%
19,000	–	21,000		32%
21,000	–	23,000		31%
23,000	–	25,000		30%
25,000	–	27,000		29%
27,000	–	29,000		28%
29,000	–	31,000		27%
31,000	–	33,000		26%
33,000	–	35,000		25%
35,000	–	37,000		24%
37,000	–	39,000		23%
39,000	–	41,000		22%
41,000	–	43,000		21%
43,000	–	No limit		20%

If her adjusted gross income (all from wages) for the year is $18,500, calculate Clarita's child and dependent care credit for 2018.
$_______________

Answer 1

Amswer = $990

Explanation:

Since both children are aged under 13 years, therefore, maximum qualifying expense is $6000.

Since expense of $3000 is under the maximum qualifying expense, therefore, full $3000 is qualifying expense for the child and dependent care tax credit. From table 6.1, for income of $18500, percentage to determine the child and dependent care credit is 33%.

Hence Child and dependent care credit is 3000*33% =$990.

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