In: Accounting
9- Please explain
Determine the amount of child tax credit in each of the following cases:
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Child Tax Credit:
The Child Tax Credit is worth up to $2,000 for each qualifying child.
The Child Tax Credit amounts change as your modified adjusted gross income (AGI) increases. In fact, once you reach a certain threshold, the credit decreases or phases out.
And the credit is reduced $50 for every $1,000 — or fraction thereof — that your modified AGI is more than:
Based on the above, please see below the calculation of child tax credit:
Sr No | Particulars | Child Tax Credit Allowed($) | Explanation |
a | A single parent with modified AGI of $214,400 and four child(ren). | 7,250 | [($2000*4(children)] less [($ 50 * 15) credit is reduced $50 for every $1,000] |
b | A single parent with modified AGI of $80,338 and three child(ren). | 6,000 | Since modified AGI is below $ 200,000. Therefore, 3 children * $ 2,000. |
c | A married couple filing a joint return, with modified AGI of $408,503 and three child(ren). | 5,550 | [($2000*3(children)] less [($ 50 * 9) credit is reduced $50 for every $1,000] |