Employees at the Hobby Hut requested that the company provide assistance in loca

Question

Employees at the Hobby Hut requested that the company provide assistance in locating professional- quality child care services during business hours. The Hut, a C cor-poration, contracts with the local Kiddie Kare agency to provide Hut employees with in-formation about child care providers location, pricing, customer ratings, and operating hours. This year, the Hut paid $ 15,000 under this contract, which includes a flat fee for a guaranteed number of employee contacts and a per- service charge after that. Compute the Hobby Huts credit for employer- provided child care for the tax year.

Explanation / Answer

hobby hut's employer -provided child care credit

Maximum credit on return = 25% of qualified child care facility expenses + 10% of qualified childcare resources

expenditure

= 35 % * $15000

= $5250

Note:- In dollar limit , credit is allowed upto $150000

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