Check my work 7 Ms. Gleason, an unmarried taxpayer, had the following income ite
ID: 2328659 • Letter: C
Question
Check my work 7 Ms. Gleason, an unmarried taxpayer, had the following income items. 0.58 points Salary Net income from a rental house $40,100 2,210 eBook Ms. Gleason has a four-year-old son who attends a daycare center while she is at work. Ms. Gleason paid $3,990 to this center and has no itemized deductions. Compute Child Credit, Dependent Credit, and her income tax after these two credits. Assume the taxable year is 2018. Use Individual Tax Rate Schedules and Standard Deduction Table. (Round your intermediate computations to the nearest whole dollar amount.) Print Child Credit Dependent Credit Income taxExplanation / Answer
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The child tax credit has been expanded to $2,000 per qualifying child and is refundable up to $1,400, subject to phaseouts. The bill also includes a temporary $500 nonrefundable credit for other qualifying dependents.
For 2018-2025, the TCJA establishes a new $500 credit for dependents who are not under-age-17 children who qualify for the $2,000 child credit.
Also, the income levels at which the child tax credit is phased out are significantly increased for 2018-2025, so many more families with under-age-17 children will now qualify. Specifically, the adjusted gross income (AGI) threshold for the child credit phase-out rule for 2018-2025 is $400,000 for married joint-filing couples and $200,000 for all others. Under prior law, the thresholds were much lower: $110,000 for married joint-filing couples, $75,000 for unmarried individuals, and $55,000 for those who use married filing separate status. Under the phase-out rule, $50 of child tax credit is phased out for every $1,000 of AGI above the applicable threshold. Any portion of $1,000 of excess AGI counts as a full $1,000 of excess AGI.