In 2016 Rita is divorced with one child.She has AGI of $20,000 resulting in a federal income tax liability of $260 and an earned income credit of $3,137.She has had $550 of federal income taxes withheld from her pay.Rita will receive a federal income refund of
A)$550.
B)$325.
C)$3,137.
D)$3,427.

Question

Quizplus · Accepted Answer

Rita's earned income credit of $3,137 exceeds her federal income tax liability of $260, resulting in a net refundable credit of $2,877 ($3,137 - $260). Since $550 was already withheld from her pay, her total refund will be $3,427 ($2,877 + $550).

In 2016 Rita Is Divorced with One Child