Problem from Chapter 9 of Byrd and Chens Canadian Tax Principles, 2020-2021 Edition

Assignment Problem Nine - 3 (Child Care Expenses) while he was unemployed during the first eight months of 2020, Mr. Leopold Morena found employment in September of that year. His employment income for these four months was $20,000. In addition he had interest income of $3,500 and received non-eligible dividends from his private company of $62,000. Mrs. Morena was employed throughout 2020, earning gross employment income of $73,000. RPP contributions of $4,200 were withheld by her employer. She had no other source of income during 2020. During 2020, Mrs. Morena attended an accounting course at a local college. The course lasted 12 weeks and required her to spend about 20 hours per week in classes and prepar- ing assignments. Because of their busy schedules, the couple incurred well documented child care costs of $16,250 (50 weeks $325 per week). Required: Determine the maximum amount that can be deducted by Mr. and Mrs. Morena for the year ending December 31, 2020, for child care expenses under the following assumptions A. They have two children, neither of whom qualify for the ITA 118.3 disability tax credit Their ages are 1 and 3 years old. B. They have three children, none of whom qualify for the ITA 118.3 disability tax credit Their ages are 3, 5, and 14 years old