Question

1. Blue Company Constructed a Childcare facility for $600,000 to be used by it employees with preschool-aged children while they are at work. Blue paid $200,000 for childcare workers and other administrative costs to run the child care center for the year. What is Blue's employer-provided childcare credit?

2. (True or False):  Ryan incurs a million dollar during the year to construct a facility that will be used exclusively for the care of its employees’ pre-school age children during normal working hours. The credit for the employer-provided a child care available to Ryan corporation to this year $225,000. The credit for the employer provided childcare available for this year is $225,000.

Answer 1

Ans 1) As per form 8882

Blue's employer provided childcare credit of 600,000 and 200,000. But, the total credit amount is limited to $150,000. Hence we will only consider a sum total of $150,000 as the employer credit.

Ans 2) False, the credit for the employer-provided child care available to ryan corporation to this year is imited to 25% of the qualified childcare facility expenditure. But the credit limit is of $150,000. Hence credit available is only that of $150,000 and not $225,000.