Trudy is Jocelyn's friend. Trudy looks after Jocelyn's four-year-old son during the day so Jocelyn can go to work. During the year, Jocelyn paid Trudy $4,180 to care for her son. What is the amount of Jocelyn's child and dependent care credit if her AGI for the year was $31,800

Respuesta :

Answer:

The answer is $810

Explanation:

Solution

Child and dependent care credit is certain percentage of qualifying care expenses based on the adjusted gross income. The maximum qualifying amount of daycare expenses is $3,000 per qualifying person.

Now from this example, Jocelyn had paid $4,180 to take care of her son and so,the qualifying amount of care expenses will be $3,000.

Since GI for the year is $31,800, the child and dependent care credit will be 27% of the qualifying care expenses that is,. $3,000 * 27% = $810