$1.$ Heinz and Sharon are Married Filing Jointly taxpayers. During $2022,$ they each made $$50,000$ in W$2$ wages $($total $$100,000).$ They also have a joint investment account. The investment account reported on a $1099-$DIV the payment of Ordinary dividends of $$1,200$ and qualified dividends of $$800.$ In the material attached to the $1099-$DIV, the documents reported that $$550$ of the ordinary dividends and $$400$ of the qualified dividends were from various foreign sources. It also reported foreign taxes paid of $$45.$ It will be helpful to review the instructions for form $1116.$

The couple has $4$ dependents who live with them: Wyatt $-22$ months old, Emily $7$ years old, Kate $19$ years old, and Becky $20$ years old. Kate is a Sophomore $($full$-$time student$)$ at UW$-$Whitewater. Kate$$s $1098$T from the University shows her tuition $($all paid in the current tax year$)$ was $$8,500$ and she had a scholarship of $$2,000.$ Becky is a Junior $($full$-$time student$)$ at UW$-$Whitewater. Becky$$s $1098$T from the University shows her tuition $($all paid in the current tax year$)$ was $$8,500$ and she had a scholarship of $$10,000.$ Neither Kate nor Becky have never had any trouble with the police. Becky has no other income.

The couple paid $$5,200$ for child care for Wyatt during the year, and $$400$ for Emily. It will be helpful to review the instructions for form $2441.$ If you have questions as to how many dependents to use for possible child and dependent care credit, see the $$TIP$$ under the heading $$Dollar Limit$$ on page $12$ of the $2022$ IRS publication $503$ Child and Dependent Care Expenses.

$1.$ Calculate Heinz and Sharon$$s tax credits for the year. Explain your answers. Show clearly how much of each credit is refundable and how much is non$-$refundable. $($SHOW ALL YOUR WORK FOR EACH CREDIT$).$

$2.$ There are several correct ways to tackle the Education Credit for Becky in # $1$ above. Explain both correct ways to address the credit and show$/$explain which way you think is better for the parents, for the children, and for family as a whole. You will find help on this in the $2022$ publication $970.$ See the $$TIP$$ on page $3,$ or $$Coordination with Pell grants and other scholarships" around page $27.$

$3.$ Explain limitations on the refundable portion of the AOTC credit related to the taxpayers age $($See $2022$ Pub $970$Refundable Part of Credit$)$ around page $21.$