Question

Your supervisor has asked you to research the following situation concerning Scott and Heather Moore. Scott and Heather are married and file a joint return. Scott works full-time as a wildlife biologist, and Heather is a full-time student enrolled at Online University. Scott’s earned income for the year is $36,000. Heather does not have a job and concentrates solely on her schoolwork. The university she is enrolled in offers courses only through the Internet. Scott and Heather have one child, Elizabeth (age 8), and pay $3,000 for child care expenses during the year. Write a memorandum stating the amount of child and dependent care credit that Scott and Heather Moore can claim. Go to the IRS website (www.irs.gov). Locate and review Publication 503.

Answer 1

Start Here No Was the care for one or more qualifying persons? Yes No Did you have eamed income during the year? Yes No Did you pay the expenses to allow you' to work or look for work? Yes Yes Were your payments made to someone you or your spouse could claim as a dependent? No Yes Were your payments made to your spouse or to the parent of your qualifying person who is your qualifying child and under age 13? No Yes Were your payments made to your child who was under the age of 19 at the end of the year? No No Are you filing a joint return? Are you single? Yes No Yes Do you meet the requirements to be considered unmarried? No Yes Yes Do you know the care provider's name, address, and identifying number? No No Did you make a reasonable effort to get this information? (See Due digence.) Yes Did you pay expenses for more than one quaifying person? No Yes Are you excluding or deducting at least $3,000 of dependent care benefits? Yes No You may be able to claim the child and dependent care credit. Fill out Form 2441 You CAN'T claim the child and dependent care credit. This also applies to your spouse, unless your spouse was disabled or a full-time student I you had expenses that mat the requiramants for 2017, except that you didn't pay them until 2018, you may be able to claim those expenses in 2018. See Expenses not paid unti me following yaar under How To Figure the Credit

The Referring to the chart given on page 5 of the Publication 503, Scott and Heather meets all the tests through the box “Were your payments made to your child who has was under the age of 19 at the end of the year”. As it is “Yes”, they cannot claim the child and dependent care credit for the year.

Hence the answer is $0.

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