Problem 7-11 Child and Dependent Care Credit (LO 7.3)

Clarita is a single taxpayer with two dependent children, ages 10 and 12. Clarita pays $3,000 ($1,500 for each child) in qualified child care expenses during the year. Her adjusted gross income and earned income (all from wages) for the year is $20,200 and she takes the standard deduction.

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Complete Form 2441, Child and Dependent Care Expenses and determine Clarita's child care credit.

If an amount is zero, enter "0". Enter amounts as positive numbers. If required round your answers to the nearest dolllar.

Form 2441 Department of the Treasury Internal Revenue Service (99)	Child and Dependent Care Expenses Attach to Form 1040, 1040-SR, or 1040-NR. Go to www.irs.gov/Form2441 for instructions and the latest information.		OMB No. 1545-0074
			2020 Attachment Sequence No. 21

Name(s) shown on return Clarita

Your social security number

You cannot claim a credit for child and dependent care expenses if your filing status is married filing separately unless you meet the requirements listed in the instructions under "Married Persons Filing Separately." If you meet these requirements, check this box.

Part I	Persons or Organizations Who Provided the CareYou must complete this part.
	(If you have more than two care providers, see the instructions.)

1	(a) Care provider's name	(b) Address (number, street, apt. no., city, state, and ZIP code)	(c) Identifying number (SSN or EIN)	(d) Amount paid (see instructions)
Betty Babysitter				fill in the blank 1

	Did you receive dependent care benefits?		No			Complete only Part II below.
			Yes			Complete Part III on the back next.
Caution: If the care was provided in your home, you may owe employment taxes. For details, see the instructions for Schedule 2 (Form 1040), line 7a.

Part II

Credit for Child and Dependent Care Expenses

2	Information about your qualifying person(s). If you have more than two qualifying persons, see the instructions.

	(a) Qualifying person's name		(b) Qualifying person's social security number	(c) Qualified expenses you incurred and paid in 2020 for the person listed in column (a)
	First	Last
	Claritas Child #1			fill in the blank 2
	Claritas Child #2			fill in the blank 3

3

Add the amounts in column (c) of line 2. Don't enter more than $3,000 for one qualifying person or $6,000 for two or more persons. If you completed Part III, enter the amount from line 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

fill in the blank 4

4

Enter your earned income. See instructions . . . . . . . . . . . . . . . . . . . . . . . . .

4

fill in the blank 5

5

If married filing jointly, enter your spouse's earned income (if you or your spouse was a student or was disabled, see the instructions); all others, enter the amount from line 4

5

fill in the blank 6

6

Enter the smallest of line 3, 4, or 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6

fill in the blank 7

7

Enter the amount from Form 1040, 1040-SR, or 1040-NR, line 11 . . . . . . .

7

fill in the blank 8

8

Enter on line 8 the decimal amount shown below that applies to the amount on line 7

If line 7 is:						If line 7 is:
Over	But not over		Decimal amount is			Over	But not over		Decimal amount is
$015,000			.35			$29,00031,000			.27
15,00017,000			.34			31,00033,000			.26
17,00019,000			.33			33,00035,000			.25
19,00021,000			.32			35,00037,000			.24
21,00023,000			.31			37,00039,000			.23
23,00025,000			.30			39,00041,000			.22
25,00027,000			.29			41,00043,000			.21
27,00029,000			.28			43,000No limit			.20

8

Xfill in the blank 9

9

Multiply line 6 by the decimal amount on line 8. If you paid 2019 expenses in 2020, see the instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

fill in the blank 10

10

Tax liability limit. Enter the amount from the Credit

Limit Worksheet in the instructions . . . . . . . .

10

fill in the blank 11

11

Credit for child and dependent care expenses. Enter the smaller of line 9 or line 10 here and on Schedule 3 (Form 1040), line 2.

11

fill in the blank 12

For Paperwork Reduction Act Notice, see your tax return instructions.

Cat. No. 11862M

Form 2441 (2020)

Feedback

Taxpayers are allowed a credit for expenses for the care of their children and certain other dependents. To be eligible for the child and dependent care credit, the dependent must either be under the age of 13 or be a dependent or spouse of any age who is incapable of self-care. If a child's parents are divorced, the child need not be the dependent of the taxpayer claiming the credit, but the child must live with that parent more than he or she lives with the other parent.

The child and dependent care credit is equal to statutory percent of the qualified expenses that decreases as adjusted gross income increases. In determining the credit, the maximum amount of qualified expenses to which the applicable percentage is applied is $3,000 for one dependent and $6,000 for two or more dependents.