Tim and Martha paid $7,500 in qualified employment-related expenses for their three young children below 13 years, who live with them in their household. Martha received $2,700 of dependent care assistance from her employer, which was properly excluded from gross income. The couple had $42,700 of AGI earned equally by Tim and Martha.

Use the appropriate tax tables or tax rate schedules.

Adjusted gross income Applicable income $15,000 or less 35% 15,001 17,000 34 17,001 19,000 33 19,001 21,000 32 21,001 23,000 31 23,001 25,000 30 25,001 27,000 29 27,001 29,000 28 29,001 31,000 27 31,001 33,000 26 33,001 35,000 25 35,001 37,000 24 37,001 39,000 23 39,000 41,000 22 41,001 43,000 21 43,001 or more 20

a. What amount of child and dependent care tax credit can they claim on their Form 1040?

b.

How would your answer differ (if at all) if the couple had AGI of $36,400 that was earned entirely by Tim? (Do not leave cells blank, enter "0" if there is no effect.)