Additional Child Tax Credit - ACTC

Forum|Forum|5 years ago
September 16, 2020
1 reply
14 views

Hi All

Does anyone know what is the link between ACTC and dividend income? When I report dividend in the system the ACTC gets reduce despite the AGI is below $200k.

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T

TaxGuyBill

Level 15

When the ADDITIONAL Child Tax Credit goes down, does the Child Tax Credit go up?

If the extra income creates more income tax, the Child Tax Credit will offset it. The higher Child Tax Credit will decrease the Additional Child Tax Credit.

A

atif1040Author

Level 3

Thank you for your reply. I understand the concept. But I need to explain to the client that more the dividend income lesser the ACTC. I need to establish a link between the two so I can explain to the client why he is not going to get full ACTC even his AGI is below the phase-out threshold.

George4Tacks

Level 15

More QUALIFIED dividend means less tax. Less tax means less credit.
Work Long Term Capital Gain into your explanation.
Make a spreadsheet with a few scenarios to show the client.

Answers are easy. Questions are hard!

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