What is the general trend of the Child and Dependent Care Credit percentage as income changes?

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Multiple Choice

What is the general trend of the Child and Dependent Care Credit percentage as income changes?

The percentage of the Child and Dependent Care Credit is determined by your earned income, so it uses a sliding scale rather than a fixed rate. As income rises, the percentage you can claim declines, moving on a range from 35% for lower incomes down to 20% for higher incomes. So the overall trend is that the credit percentage decreases as income increases, which makes the best answer that the percentage decreases with income, ranging from 20% to 35%.

The percentage of the Child and Dependent Care Credit is determined by your earned income, so it uses a sliding scale rather than a fixed rate. As income rises, the percentage you can claim declines, moving on a range from 35% for lower incomes down to 20% for higher incomes. So the overall trend is that the credit percentage decreases as income increases, which makes the best answer that the percentage decreases with income, ranging from 20% to 35%.

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