Question

Roy and Monica are married and will file a joint return. They have a daughter, Rachel, age 5. While Roy works and Monica looks for work, Rachel stays at Wee Care. Monica is not disabled. In 2011, they paid $1,500 for child care. Roy’s earned income was $24,000 and Monica had no earned income. What is the amount of their child and dependent care credit?
A) $1,500
B) $0
C) $450

Answer 1

Answer:

Unfortunately, like Monica had no earned income and they're filing jointly, Roy and Monica can't claim the credit. The correct answer is B. US$ 0.

Explanation:

1. Let's review the information given to us to answer the question correctly:

Roy and Monica are married and will file a joint return.

While Roy works and Monica looks for work, Rachel stays at Wee Care.

Amount paid by child care in 2011 = US$ 1,500

Roy's earned income = US$ 24,000

Monica's earned income = US$ 0

2. What is the amount of their child and dependent care credit?

IRS, on publication 503, related to Child and Dependent Care Expenses is crystal-clear. Taking from the official document, "You Must Have Earned Income . To claim the credit, you (and your spouse if filing jointly) must have earned income during the year."

Unfortunately, like Monica had no earned income and they're filing jointly, Roy and Monica can't claim the credit.