Problem 12-29 (LO. 3) Employees at the Hobby Hut requested that the company prov
ID: 2585056 • Letter: P
Question
Problem 12-29 (LO. 3) 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 corporation, contracts with the local Kiddie Kare agency to provide Hut employees with information 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 Hut's credit for employer-provided child care for the tax year.Explanation / Answer
The expenses incurred by Hobby Hut falls under the category 2 of Section 45 F - Qualified child care resource and referral expenditures - 10% of the expense incurred is allowed as a tax credit = 1,500