Question

Determine the amount of child tax credit in each of the following cases: Answer is complete but not entirely correct. A single parent with modified AGI of $214,000 and four child(ren). A single parent with modified AGI of $70,028 and two child(ren). A married couple filing a joint return, with modified AGI of $408,275 and three child(ren). Child Tax Credit Allowed $ 1.200 $ 2,000 S 1.586 %

Answer 1

For the year 2019, the child tax credit available is $2,000 for each qualifying child if the taxpayer's modified Adjusted gross income is $200,000 (except $400,000 in case of married filling jointly). The child tax credit is reduced by $50 for each $1,000 or fraction thereof in excess of $200,000 (or $400,000 in case of married taxpayers).

a) In this case, taxpayer is single with modified AGI of $214,000 and four children.

The Child tax credit available = $2,000 per child*4 children = $8,000

His modified AGI exceeds $200,000 by $14,000 ($214,000 - $200,000). Thus there will be fourteen $50 reductions from the available child tax credit (i.e. 14*$50 = $700)

Child tax credit allowed = $8,000 - $700 = $7,300

Therefore child tax credit allowed in this case is $7,300.

b) In this case, taxpayer is single with modified AGI of $79,026 and two children.

The Child tax credit available = $2,000 per child*2 children = $4,000

His modified AGI less than $200,000 and therefore the whole amount of child tax credit will be allowed (i.e. $4,000)

Therefore child tax credit allowed in this case is $4,000.

c) In this case, taxpayer is married filling jointly with modified AGI of $408,275 and three children.

The Child tax credit available = $2,000 per child*3 children = $6,000

His modified AGI exceeds $400,000 by $8,275 ($408,275 - $400,000). Thus there will be nine $50 reductions from the available child tax credit (i.e. 9*$50 = $450)

Child tax credit allowed = $6,000 - $450 = $5,550

Therefore child tax credit allowed in this case is $5,550.