Problem 7-9 Child and Dependent Care Credit (LO 7.3)

Calculate the amount of the child and dependent care credit allowed before any tax liability limitations or other credits for 2019 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 $27,500 during the year, while William attended law school full-time for 9 months and earned no income. They paid $3,500 for the care of their 3-year-old child, Carl.