Child and Dependent Care Credit. In each of the following
independent situations, determine the amount of the child and dependent care
tax credit. (Assume that both taxpayers are employed and the year is 2019 .)
a. Brad and Bonnie are married and file a joint return, with
earned income of $40,000 and $14,000, respectively. The ir combined AGI is
$52,000 . They have two children, ages 10 and 12, and employ a live-in nanny at
an annual cost of $9,000 .
b. Assume the same facts as in Part a, except chat Brad and
Bonnie employ Bonnie’s mother, who is nor their dependent, as the live-in nanny
.
c. Bruce is divorced and has two children, ages 10 and 16.
He has AGI and earned income of $35,000 . Bruce incurs qua lifying child care
expenses of $8,000 during the year, incurred equa lly for both children .
Bruce’s employer maintains an emp loyee dependent care assistance program .
$1,000 was paid to Bruce from this program and excluded from Bruce’s gross
income .
d. Buddy and Candice are married and file a joint return .
Their combined AGI is $50,000. Buddy earns $46,000, and Cand ice’s salary from
a part -time job is $4,000 . They incur $5,000 of qua lifying child care
expenses for a day-care facility for their two children, ages 2 and 4.
e. Ben and Bunny are marr ied and file a joint return .
Their AGI is $75,000, all earned by Bunny. Ben was a full-time student for two
semesters (10 months) at Stare University during the year. They incur $7,000 of
qualifying child care expenses for their two children, ages 6 and 4.
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