Dtermine the amount of the child tax credit in each of the following cases: A) A single parent with modified AGI of $213,700 and one child age 4. B) A single parent with modified AGI of $78,300 and three children ages 7,9 ans 12. c) A married couple, filing jointly, with a ,modified AGI of $408,233 and two children age 14 and 16. D) A married couple, filing jointly, with modified AGI of $132,355 and one child , age 13.

To claim the Child Tax Credit for 2023, 2022, 2020, and earlier tax years, you must determine if your child is eligible. All of these seven qualifying tests have to be met:1) Age test: For these tax years, a child must have been under age 17 (i.e., 16 years old or younger) at the end of the tax year for which you claim the credit.2) Relationship test: The child must be your own child, a stepchild, or a foster child placed with you by a court or authorized agency.3) Support test: To qualify, the child must have provided more than half of his or her own financial support during the tax year.4) Dependent test: You must claim the child as a dependent on your tax return. Bear in mind that in order for you to claim a child as a dependent, your child has to:be your child (or adoptive or foster child), sibling, niece, nephew or grandchild;be under age 19, or under age 24 and a full-time student for at least five months of the year; or be permanently disabled, regardless of age;have lived with you for more than half the year, andhave provided no more than half of their own support for the year.5) Citizenship test: The child must be a U.S. citizen, a U.S. national, or a U.S. resident alien. (For tax purposes, the term "U.S. national" refers to individuals who were born in American Samoa or in the Commonwealth of the Northern Mariana Islands.)6) Residence test: The child must have lived with you for more than half of the tax year for which you claim the credit. There are important exceptions, however:A child who was born (or died) during the tax year is considered to have lived with you for the entire year.Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military services, or detention in a juvenile facility, are counted as time the child lived with you.There are also some exceptions to the residency test for children of divorced or separated parents. For details, see the instructions for Form 1040.7) Family income test: The Child Tax Credit is reduced if your modified adjusted gross income (MAGI) is above certain amounts, which are determined by your tax-filing status:For tax years 2023, 2022, and 2018 through 2020, the phaseout of the credit begins with $200,000 in income ($400,000 for married filing jointly).For each $1,000 of income above the threshold, the available child tax credit was reduced by $50.A) A single parent with a modified AGI of $213,700 and one child age 4 ParticularsAmount $Amount $Child tax credit [a]2,000Less phase out reduction as MAGI is above 200,000 for single filer [b]$ 213,700 say 214,000 rounding up in multiple of 1000. 214,000-200,000= 14,000/1000 x 50 700A] Child tax credit allowed [a-b]1,300B) A single parent with a modified AGI of $78,300 and three children ages 7, 9, and 12.ParticularsAmount $Amount $Child tax credit [a] $ 2000 x no. of qualifying childred=2000 x 36,000Less phase out reduction if MAGI is above 200,000 for single filer [b]No phase out as income is below 200,000 NILB] Child tax credit allowed [a-b]6,000c) A married couple, filing jointly, with a modified AGI of $408,233 and two children age 14 and ParticularsAmount $Amount $Child tax credit [a]2,000 x 2 qualified children=4,000Less phase out reduction as MAGI is above 400,000 for joint filer [b]$ 408,233 say 208,000 rounding up in multiple of 1000. 408,000-400,000= 8,000/1000 x 50 400 x2 = 800 C] Child tax credit allowed [a-b] 3,200 D) A married couple, filing jointly, with a modified AGI of $132,355 and one child, age 13.ParticularsAmount $Amount $Child tax credit [a]2,000Less phase out reduction if MAGI is above 400,000 for joint filer [b]No phase out as income is 132,355 NILD] Child tax credit allowed [a-b]2,000ParticularsAmount $Amount $A] Child tax credit allowed 1,300B] Child tax credit allowed 6,000C] Child tax credit allowed 3,200D] Child tax credit allowed 2,000

Answered: Dtermine the amount of the child tax…

Business

Accounting

Dtermine the amount of the child tax credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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