Question

Carolyn has an AGI of $38,000 (all from earned income), two qualifying children, and is filing as a head of household for 2018. What amount of earned income credit is she entitled to? (Exhibit 8-10)

A) $0

B) $1,643

C) $3,461

D) $4,073

E) $5,716

*Hint: Don’t forget the phase-out*

Answer #1

In the tax year 2018 Earned income and adjusted gross income (AGI) must each be less than $45802 for single,head of household or widowed having 2 qualified childrens then the amount of income credit she entitiled is $5176 because the maximum amount of credit for Tax Year 2018 is:

- $6,431 with three or more qualifying children
- $5,716 with two qualifying children
- $3,461 with one qualifying child
- $519 with no qualifying children

Here she has two qualified children so she is entitiled to income tax credit of $5176

Diane is a single taxpayer who qualifies for the earned income
credit. Diane has two qualifying children who are 3 and 5 years
old. During 2019, Diane's wages are $18,900 and she receives
dividend income of $900.
Earned Income Credit Phase-Out Ranges
Number of Qualifying Children
Other than joint filers
Joint filers
Phaseout Begins
Phaseout Ends
Phaseout Begins
Phaseout Ends
None
$8,650
$15,570
$14,450
$21,370
1
19,030
41,094
24,820
46,884
2
19,030
46,703
24,820
52,493
3 or more
19,030
50,162...

Diane is a single taxpayer who qualifies for the earned income
credit. Diane has two qualifying children who are 3 and 5 years
old. During 2019, Diane's wages are $18,900 and she receives
dividend income of $900. Earned Income Credit Phase-Out Ranges
Number of Qualifying Children Other than joint filers Joint filers
Phaseout Begins Phaseout Ends Phaseout Begins Phaseout Ends None
$8,650 $15,570 $14,450 $21,370 1 19,030 41,094 24,820 46,884 2
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EXHIBIT 8-8 Child Tax Credit Phase-Out
Threshold
Filing Status
Phase-Out Threshold
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$400,000
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200,000
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Round all computations
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Click to access Earned
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a.
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apartment building. This year Reba received $50,000 of rental
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Reba and her daughter Heather (20 years old at the...

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