Question

Fundamentals of Taxation 2019

can you solve number A. for me please?

Determine the amount of child tax credit in each of the following cases: a. A single parent with modified AGI of $214,700 and three child(ren). b. A single parent with modified AGI of $81,322 and four child(ren), C. A married couple filing a joint return, with modified AGI of $408,674 and two child(ren). Child Tax Credit Allowed $ 5,700 $ 8.000 $ 3,550

Answer 1

Ans a) As per the IRS guidelines the child tax credit is $2,000 per qualifying child.

The maximum threshold of modified AGI for qualifying for child tax credit is $200,000  for a single parent. Here the single parent modified AGI is $214,700. So it is going to be gaining of the phase out.So the credit gets reduced by $50 per $1,000 over the threshold $200,000 ie for $1,000 credit is getting reduced by $50. Therefore, for $(214,700-200,000)=$14,700 credit will get reduced by [( 50*14700)/1000]=735.

So the parent can get $(2,000-735)=$1265 per child and (1265*3)=$3795 for 3 children.