Dependent care credit

[gman]

w-2 shows dependent care benefits on line 10 of 5000.00 Actual daycare is 9000. Can taxpayer use the 4000. to take
the credit

[ddoshan]

w-2 shows dependent care benefits on line 10 of 5000.00 Actual daycare is 9000. Can taxpayer use the 4000. to take
the credit

I would think not. If they have 2 qualifying children they could get credit for 1000 of the amount paid.

[FEDUKE404]

Limitations on Form 2441 amounts

Actually, it might help greatly to review Part III of Form 2441. . .

[mactoolsix]

w-2 shows dependent care benefits on line 10 of 5000.00 Actual daycare is 9000. Can taxpayer use the 4000. to take
the credit

NO - the max is 3,000 per child less any amount paid by the employer

Total paid = 9,000
Allowed 2 children = 6,000
Employer paid = 5,000
Qualified expense = 1,000

[BP.]

the max is 3,000 per child

Qualified expense = 1,000

Agree expense allowed in this case is $1,000.

But regarding the max- It is worth knowing that it is $3,000 for one qualifying person; $6,000 for two or more. Not $3,000 per person.

That means it can break down to $6,000 for one & zero for the other, or any other combination of expenses equaling $6,000 for two or more.

See the paragraph under "TIP" on p. 3 of the Form 2441 instructions.