Question

Al started a qualified childcare program for his employees in 2014. In the current year, he spent $5,000 on qualified childcare expenditures and $500 in qualified childcare referral expenses. Al's current year employer-provided childcare credit is:

Answer 1

Answer:

$1,300

Explanation:

The IRS allows employers a maximum credit equal to 25% on qualified childcare expenditures and 10% on qualified childcare referral expenses:

$5,000 x 25% = $1,250

$500 x 10% = $50

Al's current credit = $1,250 + $50 = $1,300