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.

b. His AGI is $420,000.
    

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

trey has two daughters but at the year end only one of them is under 17 so he has a credit of $2,000 in respect of his younger daughter aged 14

for his another daughter who is 17 at the year end he has a credit of $500 only

so the total credit available is $2,500

but his AGI is $420,000 pass out threshold is $400,000

therefore excess $20,000 should be divided by 1000 so we will get 20 which should be multiplied by $50 then we will get 1000

which should be reduced from the available credit of $2500 so we will get $1500 this is the amount that he will be able to claim