Question

Julia (AGI $100,000) provides more than 50 percent of the support for three individuals throughout 2020: Theresa, a child not related to Julia, age 13, lives with Julia all year long and has no income, Julia's Aunt Lucy's daughter, Margaret ,age 15 who has no gross income, lives with Julia all year and has gross income of $3000; and Emma, Julia's daughter, age 20 and a full-time student who lives in her own home all year and has gross income of $4000. What is the Child Tax Credit or Other Dependent Credit for Julia? Select one: O a. $4000 O b. $1000 O c. $1500 O d. $2500

Answer 1

Let us discuss each child individually

Theresa
She counts as a qualifying child as she fulfils the following conditions

1. She is a foster child (This is an assumption since nothing specific is mentioned)
2. She is under the age of 19
3. She lives under the same house as Julia for the whole year
4. She relies on Julia for life support

Hence, Julia gets Child Tax Credit of $2000 for Theresa

Margaret
She counts as a qualifying child as she fulfils the following conditions

1. She is Julia's niece
2. She is under the age of 19
3. She lives under the same house as Julia for the whole year
4. She relies on Julia for life support

Hence, Julia gets Child Tax Credit of $2000 for Margaret

Emma
She does not count as a qualifying child as she fails to satisfy the condition of living with Julia for more than half the year although Emma is under the age of 23 and is a full-time student.

Hence, Julia gets a total Child Tax Credit of $4000

Therefore, the right option is A ($4000)