Question

ulie paid a day care center to watch her two-year-old son while she worked as a computer programmer for a local start-up company.

What amount of child and dependent care credit can Julie claim in each of the following alternative scenarios?

EXHIBIT 8-9 Child and Dependent Care Credit Percentage

If AGI is over	But not over	Then the percentage is
$       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

a. Julie paid $2,000 to the day care center and her AGI is $50,000 (all salary).

Child and Dependent care credit: ________

b. Julie paid $5,000 to the day care center and her AGI is $50,000 (all salary).

Child and Dependent care credit: ________

c. Julie paid $4,000 to the day care center and her AGI is $25,000 (all salary).

Child and Dependent care credit: _________

d. Julie paid $2,000 to the day care center and her AGI is $14,000 (all salary).

Child and Dependent care credit: ________

e. Julie paid $4,000 to the day care center and her AGI is $14,000 ($2,000 salary and $12,000 unearned income).

Child and Dependent care credit: ________

Answer 1