Child Care Credit

[NSNM]

What is the taxpayer's eligible credit in this situation ?

1) Filer's salary $55000
2) Spouse's salary $35000
3) Paid to organization for caring one qualifying child $8800
4) Taxpayers have 2 dependent (qualifying) children ages 1 and 4. But only older child is sent to the Day Care Provider.

Reading through the instruction, it appears that both the children could be listed on Line 2, Part II, Form 2441, with qualified expenses of $8800 and $0, which results in $1200 credit. Is this right ?

How is it the expenses incurred for caring one child results in $1200 credit instead of $600. I am not certain. Can someone provide explanation. Thanks.

[WhiteOleander]

You can only deduct expenses for the child that received the daycare. The fact that there are other children has no bearing. So, one child, the max amt of qualified expenses is 3000.00. At their income level, they would get 20%. So, their credit would be 600.00.

[S T]

See a prior thread

http://www.thetaxbook.com/forums/showthread.php?t=17482&highlight=child+care+credit

Sandy

[appelman]

In TaxAct...

You actually have a checkbox for the situation in which you are including a second qualifying child with no expenses in order for the 6K limit to apply.

[WhiteOleander]

Thanks for the link. I had not seen that.

[NSNM]

Read instructions more than once, and still did not believe it.

WhiteOleander - My initial thought was exactly how you understood. But after reading more than once I needed readers' opinion.

Evan Appleman - ATX too has check boxes for qualifying dependents. But the result puzzled me. Thank you for your input and confirmation.

Sandy - Thanks for guiding to prior thread and readers' confirmation from that thread. I too had not seen it before.

Thank you all and appreciate your time and efforts.

[appelman]

Believe it or not...

Sometimes the truth really is stranger than fiction!