Problem 7-6Earned Income Credit (LO 7.2)Diane is a single taxpayer who qualifies for the earned income credit. Diane has two qualifying children who are 3 and 5 years old. During 2021, Diane's wages are $18,900 and she receives dividend income of $900. Diane’s 2019 earned income was lower than 2021.Earned Income Credit Phase-Out RangesNumber of Qualifying ChildrenOther than joint filersJoint filersPhaseout Begins Phaseout Ends Phaseout Begins Phaseout EndsNone$11,610$21,430 $17,560 $27,380 119,52042,15825,47048,108219,52047,91525,47053,8653 or more19,52051,46425,47057,414Calculate Diane's earned income credit using the EIC table in Appendix B.$fill in the blank 1

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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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Problem 7-6
Earned Income Credit (LO 7.2)

Diane is a single taxpayer who qualifies for the earned income credit. Diane has two qualifying children who are 3 and 5 years old. During 2021, Diane's wages are $18,900 and she receives dividend income of $900. Diane’s 2019 earned income was lower than 2021.

Earned Income Credit Phase-Out Ranges
Number of Qualifying Children	Other than joint filers	Joint filers
Phaseout Begins		Phaseout Ends		Phaseout Begins	Phaseout Ends
None	$11,610	$21,430	$17,560	$27,380
1	19,520	42,158	25,470	48,108
2	19,520	47,915	25,470	53,865
3 or more	19,520	51,464	25,470	57,414