Question

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.

a. His AGI is $100,000.

    

EXHIBIT 8-8 Child Tax Credit Phase-Out Threshold

Filing Status	Phase-Out Threshold
Married filing jointly	$400,000
Married filing separately	200,000
Head of household and single	200,000

Answer 1

The filing status of Trey is married filing jointly. Applicable threshold would be $ 400,000. Since, his AGI is $ 100,000 that is within the threshold, he is eligible for child credit.

Child tax credit is applicable to eligible child. Assuming all the other conditions is complied, the eligible child is under the age of 17 i.e. 16 or younger. Hence, only one child aged 14 is eligible for child tax credit.

Recently, child tax credit has been increased from $ 1000 to $ 2000 per eligible child.

However for dependent not under 17, one can claim tax credit of $ 500 for dependent

Hence, Trey can claim $ 2,500 child tax credit.