Question

Calculate the child tax credits for the following taxpayers. Please show your work.

a. Ninfa is a single mother with 8-year-old and 9-year-old dependent sons and has $50,000 of AGI.
b. Sharon and Mark have one dependent 2-year-old child and $126,300 of AGI.
c. Carol is single and has one dependent 18-year-old son and $21,000 of AGI.

Answer 1

a. Since ninfa is a single mother, the limitation amount of her AGi is $75,000. If her Adjusted Gross Income (AGI) exceeds $75,000, then she will lose $50 tax credit for every $1,000 of her AGI.

But, in this case her income of $50,000 is well below the threshold limit. Hence, she will receive $1,000 per child under child tax credits.

Therefore, her child tax credits amount will be $1,000*2 = $2,000.

b. Since, Sharon and Mark are married, the limitation amount of their AGI is $110,000 as they are filing a joint return.

Their AGI for the year exceeds the threshold limit and hence they will lose $50 per child for every $1,000 they are over the limit.

Hence, the amount of child tax credit they will lose is $126,300 - $110,000 = $16,300/1,000* 50 = $815.

Therefore, they can claim $1,000- $815 = $185 as their child tax credit.

c. Since carol is a single mother, the limitation amount of her AGi is $75,000. If her Adjusted Gross Income (AGI) exceeds $75,000, then she will lose $50 tax credit for every $1,000 of her AGI.

But, in this case her income of $21,000 is well below the threshold limit. Hence, she will receive $1,000 per child under child tax credits even if the age of the child is above 17 years, as the child is still a dependent one.

Therefore, her child tax credits amount will be $1,000.