Question 1

A qualifying child for the child tax credit must be a dependent and under the age of 14.

Accepted Answer

A qualifying child for the child tax credit must be under the age of 17 at the end of the tax year.

Question 2

The maximum amount per year of dependent care expenses that can be used for calculating the credit for child and dependent care expenses is $6,000 for two or more qualifying individuals.

Accepted Answer

This statement is true according to IRS guidelines. The maximum allowable amount for one qualifying individual is $3,000.

Question 3

The American opportunity tax and lifetime learning credits are not available to taxpayers who are married filing separately.

Accepted Answer

According to IRS rules, taxpayers who are Married Filing Separately are not eligible for the American opportunity tax credit or lifetime learning credits. These credits are only available to taxpayers who file as Single, Head of Household, Qualifying Widow(er), or Married Filing Jointly.

Question 4

The American opportunity tax credit phases out beginning at $80,000 of modified AGI for single taxpayers.

Accepted Answer

The American opportunity tax credit does begin to phase out at $80,000 of modified AGI for single taxpayers.

Question 5

The retirement savings contributions credit is available regardless of the income level of the taxpayer.

Accepted Answer

The retirement savings contributions credit, also known as the Saver's Credit, is not available to taxpayers with higher incomes. The credit has income limits that vary based on filing status and are subject to change each tax year.

Question 6

Credit for child and dependent care expenses can only be claimed on a Form 1040.

Accepted Answer

The answer of Credit for child and dependent care expenses...

Question 7

If the modified AGI of a married filing joint taxpayer exceeds $130,000 in 2016,the lifetime learning credit phases out completely.

Accepted Answer

The phase-out range for the lifetime learning credit for married filing joint taxpayers in 2016 is $111,000-$131,000. If the modified AGI exceeds $131,000, the credit will phase out completely. Therefore, the statement is true.

Question 8

All taxpayers must file Form 1116 to receive the foreign tax credit.

Accepted Answer

Only taxpayers who have paid foreign taxes and have foreign source income are required to file Form 1116 to claim the foreign tax credit.

Question 9

A qualifying individual for purposes of the credit for child and dependent care expenses includes a dependent or a spouse of the taxpayer who is incapable of caring for himself or herself.

Accepted Answer

A dependent or spouse who is incapable of caring for themselves does qualify as a qualifying individual for purposes of the credit for child and dependent care expenses.

Question 10

The maximum child tax credit is $1,000 per child.

Accepted Answer

This is true for the tax year 2021. However, there are income limitations and other eligibility criteria that determine whether a taxpayer can claim the full credit or a reduced amount.

Question 11

The maximum lifetime learning credit per taxpayer is $3,000 per year.

Accepted Answer

The maximum Lifetime Learning Credit per taxpayer is $2,000 per year, calculated as 20% of the first $10,000 of qualified education expenses.

Question 12

A taxpayer can receive both American opportunity tax and lifetime learning credits for the same education expenses in the same tax year.

Accepted Answer

A taxpayer can only claim either the American opportunity tax credit or the lifetime learning credit for the same education expenses in the same tax year. They cannot claim both credits for the same expenses.

Question 13

The maximum allowable American opportunity tax credit for the current tax year is $2,500 per eligible student.

Accepted Answer

The maximum allowable American opportunity tax credit for the current tax year is indeed $2,500 per eligible student.

Question 14

The main goal of Congress in offering tax credits is to collect additional revenues.

Accepted Answer

The main goal of Congress in offering tax credits is to create incentives for taxpayers to engage in certain behaviors, such as purchasing energy-efficient appliances or investing in certain industries. The ultimate goal is not to collect additional revenues, but rather to achieve economic, social, or environmental objectives.

Question 15

The maximum allowable credit for the elderly or the disabled is equal to 30% of the taxpayer's base amount.

Accepted Answer

The maximum allowable credit for the elderly or the disabled is actually equal to 15% of the taxpayer's base amount, not 30%.

Question 16

Qualifying expenses for the American opportunity tax and lifetime learning credits include room and board.

Accepted Answer

Room and board expenses are not considered qualifying expenses for the American opportunity tax credit or the lifetime learning credit.

Question 17

A student can only receive the lifetime learning credit if he/she is enrolled in a degree program.

Accepted Answer

A student can receive the lifetime learning credit even if he/she is not enrolled in a degree program. The credit is available for any courses taken to improve or acquire job skills, regardless of whether they are part of a degree program.

Question 18

The retirement savings contributions credit is available for married filing joint taxpayers only.

Accepted Answer

The retirement savings contributions credit (also known as the Saver's Credit) is available for eligible taxpayers including single filers, married filing jointly, and heads of households.

Question 19

The amount of foreign tax credit is equal to the amount paid to the foreign government but cannot exceed that portion of U.S.income tax attributable to the foreign income.

Accepted Answer

The statement is true.

Question 20

There are two types of education credits available,the American opportunity tax credit also known as the Hope scholarship credit)and the lifetime learning credit.

Accepted Answer

This statement is true. There are two types of education credits available: the American opportunity tax credit (also known as the Hope scholarship credit) and the lifetime learning credit.

Quiz 9: Tax Credits Form 1040, lines 46 Through 54 and Lines 66a Through 73