Margo and Jonah have two children,ages 13 and 17.Their modified AGI is $410,500.What is their child tax credit?
A)$1,450
B)$2,900
C)$4,000
D)$2,000

Question

Quizplus · Accepted Answer

The child tax credit is phased out for high-income earners. For 2023, the phase-out begins at $400,000 for married couples filing jointly. Margo and Jonah's AGI is $410,500, which is $10,500 over the threshold. The credit is reduced by $50 for each $1,000 over the threshold, resulting in a $500 reduction. The initial credit for two children is $4,000 ($2,000 per child), so the reduced credit is $3,500. However, the maximum credit per child is $1,450 due to the phase-out, totaling $2,900 for two children.

Margo and Jonah Have Two Children,ages 13 and 17