Examples The following examples show how to figure the credit for child anddependent care expenses. A filled-in page 1 of Schedule 2 (Form 1040A)that illustrates Example 1 and a filled-in Form 2441 (filedwith Form 1040) that illustrates Example 2 are shown afterthe examples. Example 1.Child Care -- Two Children Jerry and Ann Jones are married and keep up a home for their twopreschool children, ages 2 and 4. They claim their children asdependents and file a joint return using Form 1040A. Their adjustedgross income (AGI) is $27,500. Jerry earned $12,500 and Ann earned$15,000. During the year, they pay work-related expenses of $3,000 for childcare for their son Daniel at a neighbor's home and $2,200 for childcare for their daughter Amy at Pine Street Nursery School. They figure their credit on Schedule 2 as follows.  Child care by neighbor $3,000    Child care by nursery school +2,200     Total work-related expenses $5,200     Dollar limit $4,800    Lesser of expenses paid($5,200) or dollar limit  ($4,800) $4,800    Percentage for AGI of $27,500 21%    Amount of credit (21% of $4,800) $1,008   Example 2.Dependent Care Benefits Joan Thomas is divorced and has two children, ages 3 and 9. Sheworks 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-sitechild-care center while she works. The benefits from this child-carecenter qualify to be excluded from her income. Her employer reportsthe value of this service as $3,000 for the year. This $3,000 is shownin box 10 of her Form W-2, but is not included in taxable wagesin box 1. A neighbor cares for Joan's older child (Seth) after school, onholidays, and during the summer. She pays her neighbor $2,400 for thiscare. Schedule 2 - for Jerry and Ann Jones Form 2441 Page 1 for Joan Thomas Form 2441 Page 2 for Joan Thomas Joan figures her credit on Form 2441 as follows.  Work-related expenses Joan paid $2,400     Dollar limit $4,800     Minus dependent carebenefits excluded from  Joan's income -3,000   Vienna hotels Reduced dollar limit $1,800    Lesser of Haarlem accommodationexpenses paid($2,400) or dollar limit  ($1,800) $1,800    Percentage for AGI of $29,000 20%    Amount of credit (20% of $1,800) $  360