Carolyn has an AGI of $39,100 (all from earned income) and two qualifying children and is filing as a head of household. What amount of earned income credit is she entitled to?  Use (Exhibit 8-10)

 

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EXHIBIT 8-10 2020 Earned Income Credit Table Qualifying Children 0 1 2 3+ 0 1 2 3+ (1) Maximum Earned Income Eligible for Credit $ 7,030 10,540 14,800 14,800 (2) Credit % 7.65% 34 40 45 (3) Maximum Credit (1) × (2) 7.65% 34 40 45 (4) Credit Phase-Out for AGI (or earned income if greater) Over This Amount Married taxpayers filing joint returns $14,680 25,220 25,220 25,220 $538 3,584 5,920 6,660 All taxpayers except married taxpayers filing joint returns $ 538 $ 7,030 10,540 3,584 14,800 5,920 14,800 6,660 Source: Internal Revenue Code. "Rev. Proc. 2018-57." www.irs.gov. (5) Phase-Out Percentage $8,790 19,330 19,330 19,330 7.65% 15.98 21.06 21.06 7.65% 15.98 21.06 21.06 No Credit When AGI (or earned income if greater) Equals or Exceeds This Amount (4) + [(3)/(5)] $21,710 47,646 53,330 56,844 $15,820 41,756 47,440 50,954 EXHIBIT 8-10 2020 Earned Income Credit Table Qualifying Children 0 1 2 3+ 0 1 2 3+ (1) Maximum Earned Income Eligible for Credit $ 7,030 10,540 14,800 14,800 (2) Credit % 7.65% 34 40 45 (3) Maximum Credit (1) × (2) 7.65% 34 40 45 (4) Credit Phase-Out for AGI (or earned income if greater) Over This Amount Married taxpayers filing joint returns $14,680 25,220 25,220 25,220 $538 3,584 5,920 6,660 All taxpayers except married taxpayers filing joint returns $ 538 $ 7,030 10,540 3,584 14,800 5,920 14,800 6,660 Source: Internal Revenue Code. "Rev. Proc. 2018-57." www.irs.gov. (5) Phase-Out Percentage $8,790 19,330 19,330 19,330 7.65% 15.98 21.06 21.06 7.65% 15.98 21.06 21.06 No Credit When AGI (or earned income if greater) Equals or Exceeds This Amount (4) + [(3)/(5)] $21,710 47,646 53,330 56,844 $15,820 41,756 47,440 50,954

Answer rating: 100% (QA)

Locate Carolyns situation in Exhibit 810 Filing status ... View the full answer