Question
In 2020, Amanda and Jaxon Stuart have a daughter who is 1 year old. The Stuarts are full-time students and they are both 23 years
In 2020, Amanda and Jaxon Stuart have a daughter who is 1 year old. The Stuarts are full-time students and they are both 23 years old. Their only sources of income are gains from stock they held for three years before selling and wages from part-time jobs. What is their earned income credit in the following alternative scenarios if they file jointly? Use Exhibit 8-10. (Leave no answer blank. Enter zero if applicable.)
a. Their AGI is $18,400, consisting of $6,700 of capital gains and $11,700 of wages.
b. Their AGI is $18,400, consisting of $10,100 of lottery winnings (unearned income) and $8,300 of wages.
c. Their AGI is $28,150, consisting of $23,100 of wages and $5,050 of lottery winnings (unearned income). (Round your intermediate calculations to the nearest whole dollar amount.)
d. Their AGI is $28,150, consisting of $5,050 of wages and $23,100 of lottery winnings (unearned income). (Round your intermediate calculations to the nearest whole dollar amount.)
e. Their AGI is $10,100, consisting of $10,100 of lottery winnings (unearned income).
EXHIBIT 8-10 2020 Earned Income Credit Table
Qualifying Children | (1) Maximum Earned Income Eligible for Credit | (2) Credit % | (3) Maximum Credit (1) (2) | (4) Credit Phase-Out for AGI (or earned income if greater) Over This Amount | (5) Phase-Out Percentage | No Credit When AGI (or earned income if greater) Equals or Exceeds This Amount (4) + [(3)/(5)] |
---|---|---|---|---|---|---|
Married taxpayers filing joint returns | ||||||
0 | $ 7,030 | 7.65% | $ 538 | $14,680 | 7.65% | $21,710 |
1 | 10,540 | 34 | 3,584 | 25,220 | 15.98 | 47,646 |
2 | 14,800 | 40 | 5,920 | 25,220 | 21.06 | 53,330 |
3+ | 14,800 | 45 | 6,660 | 25,220 | 21.06 | 56,844 |
All taxpayers except married taxpayers filing joint returns | ||||||
0 | $ 7,030 | 7.65% | $ 538 | $ 8,790 | 7.65% | $15,820 |
1 | 10,540 | 34 | 3,584 | 19,330 | 15.98 | 41,756 |
2 | 14,800 | 40 | 5,920 | 19,330 | 21.06 | 47,440 |
3+ | 14,800 | 45 | 6,660 | 19,330 | 21.06 | 50,954 |
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