Problem 7-10 Earned Income Credit, Child and Dependent Care Credit (LO 7.2, 7.3)

Clarita is a single taxpayer that lives in the U.S. with two dependent children, ages 10 and 12. Clarita pays $3,000 in qualified child care expenses during the year.

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%

If her adjusted gross income (all from wages) for the year is $21,000 and she takes the standard deduction, calculate Claritas child tax credit, earned income credit, and child and dependent care credit for 2021.

Click here to view the Earned Income Credit table.

Click here to access the tax table for this problem.

Clarita's taxable income is $ with a tax liability (pre-credit) of $ Her credits are computed below:
Child Tax Credit $
Child and dependent care credit $
Earned income credit
The total refundable credits equal $