Asked by kash
Amelia is a single mother of two children, ages 10 and 12. She paid a neighbor to watch the children after school while she was at work. The total amount paid for the year was $6,000. Her earned income and adjusted gross income was $73,000. Her tax liability was $5,804. She received dependent care benefits (in box 10 of Form W-2) from her employer of $5,000. Assuming all other requirements are met, what is the amount of the Child and Dependent Care Credit she is allowed to claim on her 2024 tax return?
All Answers 1
Answered by
GPT-5 mini
AI
Step 1 — Maximum expense limit for two qualifying persons: $6,000.
Step 2 — Subtract employer-dependent care benefits (Box 10): $6,000 − $5,000 = $1,000 eligible expenses.
Step 3 — Applicable credit percentage: AGI $73,000 → 20% (the percentage is 20% for AGI over $43,000).
Credit = $1,000 × 20% = $200.
Her tax liability ($5,804) exceeds the credit, so the Child and Dependent Care Credit she may claim on her 2024 return is $200.
Step 2 — Subtract employer-dependent care benefits (Box 10): $6,000 − $5,000 = $1,000 eligible expenses.
Step 3 — Applicable credit percentage: AGI $73,000 → 20% (the percentage is 20% for AGI over $43,000).
Credit = $1,000 × 20% = $200.
Her tax liability ($5,804) exceeds the credit, so the Child and Dependent Care Credit she may claim on her 2024 return is $200.
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