Question

Nicholas has two qualifying children for the Child and Dependent Care Credit, Brenda (6), and Frank (9). Nicholas paid $3,000 for Brenda's care, but Frank stayed at a friend's house, so there were no expenses for him. Assuming all other tests are met, how much expense can Nicholas use to calculate his credit?

A) $2,000

B) $3,000

C) $4,000

D) $6,000

Answer 1

Based on the information available in the question, we can answer as follows:-

Per IRS, the maximum amount of Child and Dependent care credit that can be claimed per qualifying individual is $3,000 upto a maximum of 2 qualifying children. Since Frank has stayed at a friend's house and has no expenses involved, Nicholas is not eligible to claim the Child and dependent care credit for Frank. Hence, Nicholas can claim the Child and Dependent Care credit for Brenda. Hence, the maximum credit that Brenda can claim is for one child i.e Brenda - which is $3,000.

Hence, the correct answer for the question is Option B - $3,000.

Option A & Option C are incorrect as these are incorrect amounts.

Option D is incorrect as $6,000 is the maximum amount of credit that can be claimed by an individual .

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