Tax Credits (Individuals) - REG CPA
Exam Questions And Detailed Answers.
List the nonrefundable personal tax credits - Answer - Child and dependent care credit
- Elderly and permanently disabled credit
- Education credits (lifetime learning and American opportunity credit)
- Retirement savings contribution credit
- Foreign tax credit
- General business credit
- Adoption credit
What percentage of the American opportunity credit is nonrefundable? - Answer 60%
List the types of refundable credits - Answer - Child tax credit
- Earned income credit
- Federal income tax withheld (Form W-2)
- Excess social security tax paid
- American opportunity credit (40% refundable)
What is the 2020 maximum expenditure allowed for the child and dependent care credit when you have
one dependent? Two or more dependents? - Answer - one: $3,000
- two or more: $6,000
What amount is eligible for the child and dependent care credit? - Answer The lesser of...
1. the earned income of the lesser-earning spouse
2. the actual expenses incurred
3. the maximum allowable amount ($3,000 or $6,000)
, How is the child and dependent care credit calculated? - Answer Qualifying expenses * applicable
credit percentage = amount of credit
What are the applicable percentages for the child and dependent care credit? - Answer Income
$15,000 or less: 35%
Income over $43,000: 20%
Phase-out 20% to 35%
Who is eligible for credit for the elderly and/or permanently disabled? - Answer - 65 years or older or
- under 65 and retired due to permanent disability
How do you calculate the credit for elderly and/or permanently disabled for a single filer? - Answer
$5,000
- social security (all)
- (1/2) over $7,500
= Balance
x 15%
= credit
How do you calculate the credit for elderly and/or permanently disabled for a MFJ filer? - Answer
$7,500
- social security (all)
- (1/2) over $10,000
= Balance
x 15%
= credit
Who is eligible for the American Opportunity Tax Credit? (AOTC) - Answer pays for a student's first four
years of college
Exam Questions And Detailed Answers.
List the nonrefundable personal tax credits - Answer - Child and dependent care credit
- Elderly and permanently disabled credit
- Education credits (lifetime learning and American opportunity credit)
- Retirement savings contribution credit
- Foreign tax credit
- General business credit
- Adoption credit
What percentage of the American opportunity credit is nonrefundable? - Answer 60%
List the types of refundable credits - Answer - Child tax credit
- Earned income credit
- Federal income tax withheld (Form W-2)
- Excess social security tax paid
- American opportunity credit (40% refundable)
What is the 2020 maximum expenditure allowed for the child and dependent care credit when you have
one dependent? Two or more dependents? - Answer - one: $3,000
- two or more: $6,000
What amount is eligible for the child and dependent care credit? - Answer The lesser of...
1. the earned income of the lesser-earning spouse
2. the actual expenses incurred
3. the maximum allowable amount ($3,000 or $6,000)
, How is the child and dependent care credit calculated? - Answer Qualifying expenses * applicable
credit percentage = amount of credit
What are the applicable percentages for the child and dependent care credit? - Answer Income
$15,000 or less: 35%
Income over $43,000: 20%
Phase-out 20% to 35%
Who is eligible for credit for the elderly and/or permanently disabled? - Answer - 65 years or older or
- under 65 and retired due to permanent disability
How do you calculate the credit for elderly and/or permanently disabled for a single filer? - Answer
$5,000
- social security (all)
- (1/2) over $7,500
= Balance
x 15%
= credit
How do you calculate the credit for elderly and/or permanently disabled for a MFJ filer? - Answer
$7,500
- social security (all)
- (1/2) over $10,000
= Balance
x 15%
= credit
Who is eligible for the American Opportunity Tax Credit? (AOTC) - Answer pays for a student's first four
years of college
