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Case Study 2: Limits to the CreditMary has three qualifying children for the Credit for Child and Dependent Care Expenses. She spent $6,500 in qualified expenses, which was well under her earned income for the year. What would be the maximum amount Mary can use to figure the credit limit:
Click here for an explanation. The dollar limit on the amount of work-related expenses that can be used to figure the credit is $3,000 for one qualifying person or $6,000 for two or more qualifying persons. This $6,000 limit doesn't need to be divided equally among them. If the taxpayer received dependent care benefits from an employer, the amount of the benefits excluded from income must be subtracted from the dollar limit. So, the maximum amount Mary can use to figure the credit limit would be:
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Credit for Child and Dependent Care Expenses Workout
Determining the Amount of the Credit
Form 2441