Answer:
$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
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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