But for years 2010 and 2011, the credit of up to $13,360 was fully refundable for modified adjusted gross incomes
up to $185.
Certain adjustments are made to determine modified adjusted gross income
Pre-2001 Act law defined modified adjusted gross income
(MAGI) as adjusted gross income (AGI) determined without regard to certain losses and increased by certain amounts not includible in gross income.
The calculation of the earned income credit also replaces modified adjusted gross income
with adjusted gross income.
It simplified the definition of earned income by excluding nontaxable employee compensation, and simplified the credit calculation by substituting adjusted gross income for modified adjusted gross income
Roth IRA contributions are subject to a modified adjusted gross income
Alternatively, parents may choose to claim the Tuition and Fees Deduction for a child, which covers up to $4,000 in expenses for enrollment or attendance at an eligible educational institution, and is available to those with a modified adjusted gross income
of less than $80,000 ($160,000 if married filing jointly); and,
The credit phased out for taxpayers with modified adjusted gross income
between $50,000 and $60,000 for the 2009 tax year ($100,000 and $120,000 for married taxpayers filing a joint return).
Know that the amount of the deduction will be phased out if modified adjusted gross income
is between $125,000 and $135,000 for individuals and between $250,000 and $260,000 for joint fliers.
The IRS offered to help Congress reduce complexity in this regard by suggesting possible legislative "fixes" such as: Adoption of one definition of relationship for dependents and qualifying individuals for tax credits including the EITC; use of adjusted gross income rather than the modified adjusted gross income
for determining eligibility under the child tax credit and education credits; use of one set of income thresholds for the child tax credit and education credit; and, adoption of one age criterion for defining a qualifying child.
Your ability to qualify for an education IRA phases out if your modified adjusted gross income
on a joint return is between $150,000 and $160,000, or between $95,000 and $110,000 for single filers.
However, if a taxpayer's modified adjusted gross income
exceeds an inflation-adjusted threshold amount, the exclusion does not apply.