In: Accounting
Assignment 9 – Computing Credits
Michael and Diana are married and have three children, Amara, Bryan, and Skyla, ages 16, 14, and 8 respectively. They live at 120 Main Street, Flushing NY 11425. Michael is a teacher working for BMCC’s Business department. Diana works part-time for Creation, a genetic research lab. During 2019, Michael and Diana earned $52,000 in wages and $500 in interest income. Assume for 2019, Michael and Diana are filing a joint return and all their children are qualified dependents.
Instructions: Compute if any, the amount of Child Tax Credit and EIC they can claim.
The Child Tax Credit:
The child tax credit provides a credit of up to $2,000 per child under age 17. If the credit exceeds taxes owed, families may receive up to $1,400 per child as a refund. Other dependents—including children ages 17–18 and full-time college students ages 19–24—can receive a nonrefundable credit of up to $500 each.
In the given question, Michael and Diana are filing the returns together; ie, a joint return.
For the year 2019, the following provides data related to
Since there are 3 children, the total credit would be $ 2,000 * 3 persons = $ 6,000.
Total income jointly would be = $ 52,000 + $ 500 = $ 52,500