Question

Problem 8-70 (LO 8-4)

[The following information applies to the questions displayed below.]

Trey has two dependents, his daughters, ages 14 and 17, at year-end. Trey files a joint return with his wife.

What amount of child credit will Trey be able to claim for his daughters under each of the following alternative situations? Use Exhibit 8-8.

EXHIBIT 8-8 Child Tax Credit Phase-Out Threshold

Filing Status	Phase-Out Threshold
Married filing jointly	$400,000
Married filing separately	200,000
Head of household and single	200,000

Problem 8-70 Part-b

b. His AGI is $426,400.

Amount of child tax credit

c. His AGI is $429,200, and his daughters are ages 10 and 12.
     

Amount of child tax credit

Answer 1

Solution:

b	Amount of child tax credit	$    1,150
c	Amount of child tax credit	$    2,500

Notes:

1) Calculation:

b. His AGI is $426,400.

Excess AGI [426400 - 400000]	$ 26,400
CTC phaseout $ 50 per 1000 or part there of [26400/1000]*50	$    1,350
Credit Claim
Child Tax Credit[2000-1350]	$        650
Credit for Other Dependent of age of 17 or above	$        500
Total Child Tax Credit	$    1,150
c) His AGI is $429,200, and his daughters are ages 10 and 12.
Excess AGI [429200 - 400000]	$ 29,200
CTC phaseout $ 50 per 1000 or part there of [29200/1000]*50	$    1,500
Credit Claim
Child Tax Credit[2000*2]-1500]	$    2,500
Credit for Other Dependent of age of 17 or above	$           -
Total Child Tax Credit	$    2,500

2) Question has been done on 2019 Year basis.

3) For dependent of Age of 17 or above, tax credit will be $500 only.