11/06/2024
Child tax credit example:
🧍♂️ Let’s say Angie is a single filer with a MAGI (modified adjusted gross income) of $216,000 and three qualifying dependent children.
💎 Here’s how you would calculate Angie’s CTC amount.
🗣️ First, determine the base credit amount by multiplying the maximum amount by the number of qualifying children.
💰$2,000×3=$6,000
🗣️ Next, calculate the phase-out amount.
🚨 Remember, the CTC is worth $50 less for every $1,000 your MAGI is over the CTC income limit.
💰Angie MAGI is $16,000 over the phase-out limit.
🚨 To calculate Angies credit adjustment, divide the overage amount by $1,000, and then, multiply by $50.
💰$16,000÷$1,000=16
💰16×$50=$800
🗣️ Finally, subtract Angies credit adjustment from the base credit amount.
💰$6,000-$800=$5,200
😁 Angie would qualify for a CTC of $5,200 total, or $1,733 per child.
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