Question

Your supervisor has asked you to research the following situation concerning Scott and Heather Moore. Scott and Heather are married and file a joint return. Scott works full-time as a wildlife biologist, and Heather is a full-time student enrolled at Online University. Scott’s earned income for the year is $36,000. Heather does not have a job and concentrates solely on her schoolwork. The university she is enrolled in offers courses only through the Internet. Scott and Heather have one child, Elizabeth (age 8), and pay $3,000 for child care expenses during the year. Write a memorandum stating the amount of child and dependent care credit that Scott and Heather Moore can claim. Go to the IRS website (www.irs.gov). Locate and review Publication 503.

Answer 1

and dependent credit is allowed upto between care child and dependent Care Credit: to child 2004 to 354 of kncome an Expenses Paid. in hacone is betwo be low $15000 full credit of 35t allowed. for every additional increase in income of $2000, 1% Credit is decreases for the given case income of Scott = $36000 child Care Credit allowed: 24% of $ 96000 (or actual Expenses (whichever is lower = 8640 (on 3000 + 23000$. In this case full amount of $1000 is allowed