Question

Kylie is a single mom with two dependent children, Tanner, age 7 and Olivia, age 11. She has AGI of $36,000 and paid $5,300 to a qualified day care center for the two children. What amount of credit can Kylie receive for the child and dependent care credit?

a. $5,300.
b. $1,060.
c. $1,200.
d. $1,272.

Answer 1

d. $1,272.

Step-by-step explanation:

The computation of the amount of credit that received for child and dependent care credit is shown below:

= Total expense × applicable percentage

= $5,300 × 35% - {($36,000 - $15,000) ÷ $2,000 × 1%}

= $5,300 × 24%

= $1,272

hence, the amount of credit that received for child and dependent care credit is $1,272