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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Example 1. George is a widower with one child and and dollar limits) by a percentage. This percentage de-
earns $24,000 a year. He pays work-related expenses of pends on your adjusted gross income shown on Form
$2,900 for the care of his 4-year-old child and qualifies to 1040, 1040-SR, or 1040-NR, line 11. The following table
claim the credit for child and dependent care expenses. shows the percentage to use based on adjusted gross in-
His employer pays directly to his dependent care provider come.
an additional $1,000 under a qualified dependent care
benefit plan. This $1,000 is excluded from George's in- IF your adjusted gross income is: THEN the
come. Over: But not over: percentage is:
Although the dollar limit for his work-related expenses $ 0 — $15,000 35%
is $3,000 (one qualifying person), George figures his 15,000 — 17,000 34%
credit on only $2,000 of the $2,900 work-related expenses 17,000 — 19,000 33%
he paid. This is because his dollar limit is reduced as 19,000 — 21,000 32%
21,000 — 23,000 31%
shown next. 23,000 — 25,000 30%
25,000 — 27,000 29%
George's Reduced Dollar Limit 27,000 — 29,000 28%
1) Maximum allowable expenses for one 29,000 — 31,000 27%
qualifying person. . . . . . . . . . . . . . . . . . . . . . $3,000 31,000 — 33,000 26%
2) Minus: Dependent care benefits George 33,000 — 35,000 25%
excludes from income . . . . . . . . . . . . . . . . . . . −1,000 35,000 — 37,000 24%
3) Reduced dollar limit on expenses George 37,000 — 39,000 23%
can use for the credit. . . . . . . . . . . . . . . . . . . $2,000 39,000 — 41,000 22%
41,000 — 43,000 21%
43,000 — No limit 20%
Example 2. Randall is married and both he and his
wife are employed. Each has earned income in excess of To qualify for the credit, you must have one or more
$6,000. They have two children, Anne and Andy, ages 2 qualifying persons. You should show the expenses for
and 4, who attend a daycare facility licensed and regula- each person on Form 2441, line 2, column (d). It is possi-
ted by the state. Randall's work-related expenses are ble a qualifying person could have no expenses and a
$6,000 for the year. second qualifying person could have expenses exceeding
Randall's employer has a dependent care assistance $3,000. You should list -0- for the one person and the ac-
program as part of its cafeteria plan, which allows employ- tual amount for the second person. The $6,000 limit that
ees to make pre-tax contributions to a dependent care applies to two or more qualifying persons would be used
flexible spending arrangement. Randall has elected to to figure your credit unless you already excluded or de-
take the maximum $5,000 exclusion from his salary to ducted, in Part III of Form 2441, certain dependent care
cover dependent care expenses through this program. benefits paid to you (or on your behalf) by your employer.
Although the dollar limit for his work-related expenses
is $6,000 (two or more qualifying persons), Randall figures Example. Roger and Megan Paris have two qualifying
his credit on only $1,000 of the $6,000 work-related ex- children. Susan is 9 years old, and James is 15 years old
pense paid. This is because his dollar limit is reduced as and is disabled. They received $1,000 of dependent care
shown next. benefits from Megan's employer during 2023, but they in-
curred a total of $19,500 of child and dependent care ex-
Randall's Reduced Dollar Limit penses. They complete Part III of Form 2441 to exclude
1) Maximum allowable expenses for two the $1,000 from their taxable income (offsetting $1,000 of
qualifying persons. . . . . . . . . . . . . . . . . . . . . . $6,000 their expenses). Roger and Megan continue to line 27 to
2) Minus: Dependent care benefits selected figure their credit using the remaining $18,500 of expen-
from employer's cafeteria plan and ses.
excluded from Randall's income. . . . . . . . . . . . . −5,000
Line 30 tells them to complete line 2 without including
3) Reduced dollar limit on work-related expenses
Randall can use for the credit. . . . . . . . . . . . . . . $1,000 any dependent care benefits. They complete line 2 of
Form 2441, listing both Susan and James, as shown in the
Line 2 Example. They check the box in column (c) to indi-
Amount of Credit cate that James is disabled.
To determine the amount of your credit, multiply your
work-related expenses (after applying the earned income
Publication 503 (2023) 13
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