Question

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.

a. His AGI is $100,000.

b. His AGI is $420,000.

c. His AGI is $420,100, and his daughters are ages 10 and 12.

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

Answer 1

ans a
AGI $100000
$2500 is the child tax credit	answer
As AGI is under the phase out threshold hence
$2000 is allowed for child who is 14 (under age 17)
and $500 is allowed for another daughter who is 17 so she is qualifying dependent
and b
As he crosses $400000 phaseout threshold limit hence the child tax credit limit is
so excess over $400000 is (420000-400000)=20000
20000/1000	20
The amount of phase out
20*$50	1000
Allowable credit is
2500-1000	$1,500	answer 2
ans c
As both are under 17 so maximum credit allowed is $2000*2=$4000
As he crosses $400000 phaseout threshold limit hence the child tax credit limit is
so excess over $400000 is (420000-420100)=20100
20100/1000	20.1	21 rounded off
The amount of phase out
21*$50	1050
Allowable credit is 4000-1050	2950	answer c
If any doubt please cpomment