Question

(All of the info give so assume for the current tax year ? )

Trey claims a dependency exemption for both of 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?

a. His AGI is $102,700.

b. His AGI is $123,700.

c. His AGI is $131,800, and his daughters are ages 10 and 12.

Answer 1

(a). When AGI is 102700;

Trey can claim $1000 child credit

Explanation;

As per question, it is given in the question that AGI is $102700. So this is less than phase-out threshold ($110000).

So, Trey can claim $1000 child credit because only one child is below than 17 years.

(b). When AGI is $123700;

Trey can claim $300 child credit

Explanation;

As per question, it is given in the question that AGI is $123700.

1. ($123700 AGI - $110000 phase-out threshold) = $13700

2. ($13700 / $1000) = 13.7 or 14 (Approx.)

3. Phase-out (14 * 50) = $700

4. $1000 allowed child credit – $700 phase out = $300

(C). When AGI is $131800, and his daughters are ages 10 and 12;

Trey can claim $900 child credit

Explanation;

As per question, it is given in the question that AGI is $131800.

1. ($131800 AGI - $110000 phase-out threshold) = $21800

2. ($21800 / $1000) = 21.8 or 22 (Approx.)

3. Phase-out (22 * 50) = $1100

4. $2000 allowed child credit (For 2 child) – $1100 phase out = $900