Ivanna, who has three children under age 13, worked full-time while her spouse, Sergio, was attending college for nine months during the year. Ivanna earned $28,000 and incurred $9,100 of child care expenses. Ivanna and Sergio's credit for child and dependent care expenses is?

Based on the period Sergio attended college and the relevant tax laws, Sergio's credit is $1,260.

When a person is going to college, they are assumed to make $500 per month. Sergio's earnings are therefore:

= 500 x 9 months

= $4,500

With a joint Adjusted Gross Income of $28,000 for the both of them, they can get a tax credit of 28% of their earnings.

As Sergio is assumed to have made $4,500, the tax credit is:

= 28% x 4,500

= $1,260

In conclusion, Sergio's credit is $1,260.

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$1,260

Explanation:

Remember, we are dealing with a case of a married couple. Therefore, we apply the tax credit rule patterning to legally married couples.

Note that the rule is restricted to the lesser of

- real expenses,

- $6,000 (in this case they have three children which implies they have more than two qualifying children),

- the total earned income of the lowest taxpayer in the family.

Since the rule gives an exception for students. We could assumed that Sergio earned $500 for each month he was attending college. That is 9 * $500 = $4,500; the Credit = $4,500 * 28%= 1,260