Question

Problem 7-10
Child and Dependent Care Credit (LO 7.3)

Clarita is a single taxpayer with two dependent children, ages 10 and 12. Clarita pays $3,000 in qualified child care expenses during the year.

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% If her adjusted gross income (all from wages) for the year is $19,600 and she takes the standard deduction, calculate Clarita’s earned income credit and child and dependent care credit for 2019. Click here to view the Earned Income Credit table. Child and dependent care credit $ Earned income credit $

Answer 1

Year 2019	Amt $	Remarks
Clarita's Adjusted Gross Income for 2019	$               19,600
No of Children	2
Max earned Income credit for 2019
when Max Earnings of Filer is $46703 and
no of Children is 2 = $5828
So the Earned Income Credit that
Clarita can claim in 2019 is $5828.
Child and dependednt care credit
The actual Qualified Child care expense
made by Clarita in 2019 =	$                 3,000
Child and dependednt care credit %
that Clarita can claim in 2019 =	32%	As the Adjusted Gross Income is between $19000 to $ 210000
Amount of Credit =$3000*32% =	$                    960
Hence the Child and Dependent Care
Credit Avavilable for 2019 is $960