Question

Carolyn has an AGI of $38, 400 (all from earned income), two qualifying children, and is filing as a head of household. What amount of earned income credit is she entitled to?
a) $4.256
b) $5, 572
c) $3, 305
d) $1, 316
e) $0

Answer 1

Answer:

d) $1, 316

Explanation:

Particulars                    Amount

Maximum Credit           $5,572

Phase out limit              $4,256   (38,400 - 18,190)*21.06%

Earned Income Credit Entitled to = Maximum Credit - Phase out limit

Earned Income Credit Entitled to = $5,572 - $4,256

Earned Income Credit Entitled to = $1,316