George and Jill are husband and wife, ages 67 and 65 respectively. During the year, they receive Social Security benefits of $4,000 and have adjusted gross income of $11,000. Assuming they file a joint return, their tax credit for the elderly, before considering any possible limitation due to their tax liability, is:

Question

Quizplus · Accepted Answer

The tax credit for the elderly is calculated based on their age, filing status, and income. For a joint return where both are eligible, the base amount is $7,500. Their adjusted gross income plus half of their Social Security benefits is $13,000 ($11,000 + $2,000). The excess over $10,000 is $3,000, which reduces the base amount to $4,500. The credit is 15% of $4,500, which is $675. However, the maximum credit is $450 due to limitations.

George and Jill Are Husband and Wife, Ages 67 and 65