Example The following example shows how to figure the credit for child and dependent care expenses for two children when employer dependent care benefits are involved. The filled-in Form 2441 is shown at the end of this chapter. Illustrated example. Joan Thomas is divorced and has two children, ages 3 and 9. She works at ACME Computers. Her adjusted gross income (AGI) is $29,000, and the entire amount is earned income. Joan's younger child (Susan) stays at her employer's on-site child-care center while she works. The benefits from this child-care center qualify to be excluded from her income. Her employer reports the value of this service as $3,000 for the year. This $3,000 is shown in box 10 of her Form W-2, but is not included in taxable wages in box 1. A neighbor cares for Joan's older child (Seth) after school, on holidays, and during the summer. She pays her neighbor $2,400 for this care. Joan figures her credit on Form 2441 as follows. Work-related expenses Joan paid   $2,400   Dollar limit $4,800 Minus: Dependent care benefits excluded from Joan's income   -3,000   Reduced dollar limit   $1,800   Lesser of expenses paid ($2,400) or dollar limit ($1,800) $1,800 Percentage for AGI of $29,000   x .20   Amount of credit (20% of $1,800)   $ 360   Form 2441,Forms: 2441Page 1 Form 2441, Page 2