Ryan and Edith file a joint return showing $130,000 of AGI (with no exclusions under Secs.911,931,and 933).They have three dependent children ages 7,9,and 13.What is the amount of their child credit?
A)$0
B)$1,000
C)$2,000
D)$3,000

Question

Quizplus · Accepted Answer

The child tax credit is worth up to $2,000 per dependent child under the age of 17. With three dependent children, Ryan and Edith are eligible for a child credit of $6,000. However, the credit is subject to phase-out.
Since their AGI is $130,000, they are in the phase-out range for the child credit. The phase-out occurs at $400,000 AGI for married couples filing jointly. For every $1,000 of AGI above the threshold, the credit is reduced by $50. So, Ryan and Edith's child credit is reduced by $1,500 ([$130,000 - $400,000] / $1,000 × $50).
Thus, the amount of their child credit is $2,000 - $1,500 = $500.

Ryan and Edith File a Joint Return Showing $130,000 of AGI