Paul and Karen are married, and both are employed (Paul earns $44,000 and Karen earns $9,000 during 2017). Paul and Karen have two dependent children,
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Paul and Karen are married, and both are employed (Paul earns $44,000 and Karen earns $9,000 during 2017). Paul and Karen have two dependent children, both under the age of 13 (Samuel and Joy). So they can work outside the home, Paul and Karen pay $3,800 ($1,900 for each child) to Sunnyside Day Care Center (422 Sycamore Road, Ft. Worth, TX 76028; Employer Identification Number: 11-2345678) to care for their children while they are working.
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a. Assuming that Paul and Karen file a joint return, what, if any, is their tax credit for child and dependent care expenses?
b. Complete Form 2441 for Paul and Karen; their AGI is $53,750, and their tax liability before any available child care credit is $2,825. Relevant Social Security numbers are as follows: Paul (123-45-6789); Sam (123-45-6788); Joy (123-45-6787). Neither Paul nor Karen received any child care benefits from their employers.
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