Question

Santiago and Amy are married and file a joint tax return, claiming as dependents their three children, ages 12, 14, and 18. Their AGI is $135,000.

Santiago and Amy's child tax credit is $

Answer 1

Answer - Santiago and Amy's child tax credit = $750

Reason -

Santiago and Amy can only claim the credit for the children ages 12 and 14.

The maximum child tax credit of $2,000 ($1,000 x 2 children) is reduced because Santiago and Amy's Aggregate Gross income (AGI) is in excess of the $110,000 threshold.

Therefore, the maximum credit must be reduced by $50 for every $1,000 (or part thereof) above the threshold amount.

Therefore,

($135,000 - $110,000)/$1,000 = 25

The credit reduction equals ($50 x 25) = $1,250.

Therefore, the child tax credit is ($2,000 - $1,250) = $750

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