I know the program will calculate it for you but I am just very curious how is the Dependent Care Credit calculated. So we spent in total 10,000$ in daycare for my kids in 2022. and among this 10k, we have the 5k income withheld reimbursed. how come the dependent care credit is 200$? So you use the amount of expense total minus the 5000$, then multiply a rate depending on your AGI? To get 200$ that means our rate is only 4%?
The Dependent Care Credit is worth as much as 35% of your qualified expenses, up to $3,000, (for one qualifying person), and $6,000 (for two or more qualifying persons). Your percentage depends on your adjusted gross income, with the higher percentages applying to lower incomes and vice-versa.
For example, a married couple supporting two qualifying persons who paid $6,000 in qualified expenses may qualify for up to $2,100 in credits, depending on their adjusted gross income.
For more information about the credit, please see this TurboTax Help article.