Question

Required information Skip to question [The following information applies to the questions displayed below.] 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.

b. His AGI is $424,200.

Amount of child tax credit:

c. His AGI is $428,200, and his daughters are ages 10 and 12.

Amount of child tax tax credit:

Answer 1

b. Here one of the age of daughter is 17, but Child tax credit cannot be claimed when the daughter age is above 17. So Child tax credit can be claimed for the daughter who is 14 year old. The Child tax credit is $2000 per qualifying child

The phaseout of credit begins for joint filiers is $400000. Here AGI is $424200. Excess is $24200. According to the rule of Modified Adjusted Gross Income (MAGI), there will be reduction of $50 for every $1000 of excess income above threshold. So the

phase out = (24200/1000)*50

= $1210

Child tax credit is $2000 - 1210 = $790

c. It is as similar as above. Since the age if 2 children is below 17 the Child tax credit can be claimed at maximum is $ 4000 (2000*2 children )

Amount exceeding Threshold is $428200 - $400000

= $28200

Phase out = (28200/1000)*50

= $1410

Here child tax credit limit is $4000

Child tax credit is 4000-1410

Child tax credit = $2590