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Herb and Carol are married and file a joint tax return claiming their three children, ages...

Herb and Carol are married and file a joint tax return claiming their three children, ages 4, 5, and 18, as dependents. Their AGI for 2018 is $405,600 and their pre-credit tax liability is about $84,000. What is Herb and Carol's child tax credit for 2018?

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Answer #1

Child tax credit (CTC) applies for child dependants below 17 years of age only. Hence Herb and Carol will be able to claim CTC only for 2 children. Also the CTC  is reduced by $50 for every $1000 of AGI excess to $400K threshold.

Tax Filing Status Maximum AGI for Full Credit AGI Where Credit Disappears
Married filing jointly $     400,000 Over $440,000
AGI $          405,600
AGI > threshold $               5,600
Child tax credit per child u/17 for 2018 $               2,000
Herb and Carol have 2 children under 17, hence CTC w/out considering threshold $               4,000
Reduction / 1000 USD in CTC if AGI is more than $400K $                    50
reduction in CTC $                  250
Net Child tax credit for Herb and Carol in 2018 $               3,750

Apart from this, for their third child aged 18 years, they will be able to claim Credit for Other Dependents (ODC) of $500.

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