For purposes of the credit, the program should assign your wife $250 or $500 of income for each month she was a full time student (depending if care was provided for one or two or more children). She is not assigned income for months she was a part-time student. And she gets credit for her actual income for the months in which she was working.
However, even though expenses paid during times of looking for work are considered "qualified expenses" for the credit, the actual amount of the credit is limited by her actual earnings or her assigned earnings.
