With 2 qualifying children and a Married Filing Jointly filing status, your modified adjusted gross income must be less than $150,000 in order to qualify for this credit. Since your $151,344 of modified adjusted gross income is over this limit, you don't qualify.
So, my question is....Can I make a IRA or 401k contribution of $1345, and then get a $2000 additional federal tax refund because I have 2 kids ? Or is there another way to decrease my modified adjusted gross income, to earn child credit ?
Thanks for any or all answers, Kenny
No, it doesn't work that way at all. The amount of the credit declines with each $1,000 of your income, so at even a close amount to the income limits, your credit would be small.
This also is not a refundable credit, meaning it does not directly increase your refund. Rather, it is a subtraction from your taxable income, so what you save is the amount of tax you would have owed on that amount of income.
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