Child and Dependent Care Credit (LO 7.3) Calculate the amount of the child and dependent care credit allowed for 2018 in each of the following cases, assuming the taxpayers had no income other than the stated amounts. TABLE 6.1 CHILD AND DEPENDENT CARE CREDIT PERCENTAGES Adjusted Gross Income Applicable Percentage Over But Not Over $0 – $15,000 35% 15,000 – 17,000 34% 17,000 – 19,000 33% 19,000 – 21,000 32% 21,000 – 23,000 31% 23,000 – 25,000 30% 25,000 – 27,000 29% 27,000 – 29,000 28% 29,000 – 31,000 27% 31,000 – 33,000 26% 33,000 – 35,000 25% 35,000 – 37,000 24% 37,000 – 39,000 23% 39,000 – 41,000 22% 41,000 – 43,000 21% 43,000 – No limit 20% a. William and Carla file a joint tax return. Carla earned $26,000 during the year, while William attended law school full-time for 10 months and earned no income. They paid $3,500 for the care of their 3-year-old child, Carl. $ b. Raymond and Michele file a joint tax return. Raymond earned $32,500 during the year, while Michele earned $8,000 for the year from a part-time job. They paid $7,000 for the care of their two children under age 13.$ c. Beth is a single taxpayer who has two dependent children under age 5. Beth earned $23,500 in wages during the year and paid $6,700 for the care of her children.$

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter7: Deductions And Losses: Certain Business Expenses And Losses

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Problem 31CE

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Child and Dependent Care Credit (LO 7.3)

Calculate the amount of the child and dependent care credit allowed for 2018 in each of the following cases, assuming the taxpayers had no income other than the stated amounts.

TABLE 6.1

CHILD AND DEPENDENT CARE CREDIT PERCENTAGES

Adjusted Gross Income		Applicable Percentage
Over		But Not Over
$0	–	$15,000	35%
15,000	–	17,000	34%
17,000	–	19,000	33%
19,000	–	21,000	32%
21,000	–	23,000	31%
23,000	–	25,000	30%
25,000	–	27,000	29%
27,000	–	29,000	28%
29,000	–	31,000	27%
31,000	–	33,000	26%
33,000	–	35,000	25%
35,000	–	37,000	24%
37,000	–	39,000	23%
39,000	–	41,000	22%
41,000	–	43,000	21%
43,000	–	No limit	20%

a. William and Carla file a joint tax return. Carla earned $26,000 during the year, while William attended law school full-time for 10 months and earned no income. They paid $3,500 for the care of their 3-year-old child, Carl.
$

b. Raymond and Michele file a joint tax return. Raymond earned $32,500 during the year, while Michele earned $8,000 for the year from a part-time job. They paid $7,000 for the care of their two children under age 13.
$

c. Beth is a single taxpayer who has two dependent children under age 5. Beth earned $23,500 in wages during the year and paid $6,700 for the care of her children.
$

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