Case Study 5: Work-Related Expense Test

The previous interview with Dorothy continues below with questions from the Credit for Child & Dependent Care Expenses screening sheet in the Volunteer Resource Guide, Tab G, Nonrefundable Credits.

Does Dorothy pass the work-related expense test?

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Volunteer says…

Dorothy responds…

Did the caregivers assist your daughter only when you and your husband were at work?

Yes. We couldn't afford any more help than that. All last year, they arrived just before we went to work and they left when my mother came at 2 p.m.

Do you pay your mother to care for your daughter?

No, we don't. She just does it because she loves her granddaughter.

That's wonderful. You're all very fortunate. So all your expenses were only to allow you to work — or in your husband's case, to go to school or look for work prior to becoming employed.

Yes, exactly.

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Dorothy passes the work-related expense test because the expenses are paid so that she and her husband can work, and are not paid to a dependent relative.

Credit for Child and Dependent Care Expenses Workout

Five Eligibility Tests

Case Study 5: Work-Related Expense Test