Topic 15 - Child Tax Credit and Additional Child Tax Credit

1. Look at the Form 1040A you prepared for Andy Brown. What is the amount on Form 1040A, Line 32?

a. $ 2,271.
b. $ 1,621.
c. $ 2,781. 
d. None of the above.

2. Look at the Form 1040A you prepared for Andy Brown. What is the amount on Form 1040A, Line 44a?

a. $ 3,719.
b. $ 4,879.
c. $ 4,229. 
d. None of the above.

3. To claim the child tax credit, you cannot claim the credit on

a. Form 1040EZ or Form 1040NR-EZ.
b. Form 1040 or Form 1040A.
c. Form 1040NR. 
d. None of the above.

4. To claim the child tax credit, you need to figure your earned income. For this purpose, income includes

a. Only taxable earned income.
b. Only non-taxable combat pay.
c. Only taxable combat pay. 
d. Both A and B are correct.

5. This credit is for certain individuals who get less than the full amount of the child tax credit.

a. Earned income credit.
b. Additional child tax credit.
c. Child tax credit. 
d. All of the above.

6. For federal, this credit may give you a refund even if you do not owe any tax.

a. Child tax credit.
b. Additional child tax credit.
c. Child and dependent expenses care credit. 
d. None of the above.

7. An adopted child is always treated as your own child and includes a child lawfully placed with you for legal adoption.               

True False

8. You must reduce your child tax credit if you are married filing separately and your modified adjusted gross income (AGI) is above

a. $ 110,000.
b. $ 75,000.
c. $ 55,000. 
d. None of the above.

9. You must reduce your child tax credit if you are single and your modified adjusted gross income (AGI) is above

a. $ 110,000.
b. $ 75,000.
c. $ 55,000. 
d. None of the above.

10. You must reduce your child tax credit if you are Head of household and your modified adjusted gross income (AGI) is above

a. $ 110,000.
b. $ 75,000.
c. $ 55,000. 
d. None of the above.

11. You must reduce your child tax credit if you are Qualifying widow (er) and your modified adjusted gross income (AGI) is above

a. $ 110,000.
b. $ 75,000.
c. $ 55,000. 
d. None of the above.

12. The additional child tax credit

a. Decreases your tax.
b. Increases your tax.
c. Gives you a refund without affecting your tax. 
d. Increases your tax withholding.

13. Steve and Gretchen Leaf have four children who are all qualifying children for the child tax credit. Steve and Gletchen's adjusted gross income (AGI) (Form 1040, line 38) is $112,000. They will file a joint return. Assume that their tax is $2,000. How much child tax credit do Steve and Gletchen qualify for?

a. $ 2,000.
b. $ 4,000.
c. $ 3,900. 
d. $ 100.

14. Steve and Gretchen Leaf have four children who are all qualifying children for the child tax credit. Steve and Gletchen's adjusted gross income (AGI) (Form 1040, line 38) is $112,000. They will file a joint return. Assume that their tax is $2,000. How much additional child tax credit do Steve and Gletchen qualify for?

a. $ 2,000.
b. $ 4,000.
c. $ 1,900. 
d. $ -0-.

15. Linda Jones files a head of household and has two dependent children under age 17. The children are qualifying children for purposes for the child tax credit. Linda's only income is $30,350 from her salary. Linda's tax on Form 1040 is $1,334. She claims a $225 credit for child and dependent care expenses on line 47. She claims a $1,029 earned income credit on line 66a. She has no other credits. What is Linda's child tax credit?

a. $ 1,334.
b. $ 2,000.
c. $ 1,109. 
d. $ -0-.

16. Laurie Zepeda files as head of household and has three dependent children under 17. The children are qualifying children for purposes of the child tax credit. Laurie's only income is $39,000 from her salary. Laurie's tax on Form 1040 is $2,076. She has no credits. What is Laurie's additional child tax credit?

a. $ 3,000.
b. $ -0-.
c. $ 2,076. 
d. $ 924.

17. Which of the following statements is NOT  true regarding the child tax credit for 2007?

a. A qualifying child must be under age 17 at the end of 2007.
b. The child tax credit reduces tax owed while the additional child tax credit may give you a refund even if you do not owe any tax.
c. The child tax credit may be reduced depending on modified adjusted gross income.
d. The maximum child tax credit for each qualifying child is $ 800 in 2007.

18. To claim the child tax credit your qualifying child must be

a. a child under age 17 by the end of tax year 2007.
b. your child, stepchild, grandchild, great-grandchild, brother and sister.
c. A child who did not provide over half of his or her own support for 2007.
d. all of the above

19. Credits, such as the child tax credit, the adoption credit, or the credit for child and dependent care expenses credit, are used to reduce tax. If your tax on Form 1040, line 46, or Form 1040A, line 28, is zero,

a. Do not figure the child tax credit because there is not tax to reduce.
b. Figure the child tax credit so you can receive a higher refund.
c. Then you do not have to file a return, because there is no tax to pay.
d. Then look for special rules that apply in this case.

20. If you are married filing jointly, you must reduce your child tax credit if your modified adjusted gross income (AGI) is above

a. $ 75,000
b. $ 110,000
c. $ 55,000
d. $ 11,750

21. For tax year 2007, the maximum amount you can claim for the child tax credit is

a. $600 for each qualifying child.
b. $2,400 for each qualifying child.
c. $1,000 for each qualifying child.
d. $60 for each qualifying child.

22. For purposes of the child tax credit, your modified adjusted gross income (AGI) if your AGI plus

a. Any amount excluded from income because of the exclusion of income from Puerto Rico.
b. Any amount on line 45 or 50 of Form 2555, or any amount on line 18 of Form 2555-EZ.
c. Any amount on line 15 of Form 4563.
d. Any of the above.

23. Esperanza Martinez is single and has four dependent children living with her. Thus, she qualifies for Head of Household filing status. Her children are all under 17 and Esperanza's earned income is $25,000. The social security tax withheld is $1,550 and Medicare is $362. Her Earned income credit amount is $2,156. Please figure out what her Additional Child Tax Credit is for tax year 2007.

a. $ 2,156.
b. $ 1,912.
c. $ 1,988.
d. $ -0-.

24. Albert has one child and before applying the child tax credit, his tax liability is $500. Assuming he qualifies, what is the amount of his child tax credit?

a. $500.
b. $1,140.
c. $1,000.
d. $0.

25. To claim the additional child tax credit, make sure you figured the amount, if any, of your child tax credit.                         

True False

26. The following is considered a temporary absence for special circumstances and counts as time lived with you

a. Absence due to school or vacation.
b. Absence due to medical care or military service.
c. Absence due to detention in a juvenile facility.
d. Any of the above.

27. The child tax credit

a. decreases your tax.
b. increases your tax.
c. gives you a refund without affecting your tax.
d. increases your tax withholding.

28. A qualifying child for purposes of the child tax credit is a child who was a U.S. citizen, a U.S. national, or a resident of the United States.                     

True False

29. Your child provided over half of her own support for 2007, then

a. your child can claim her own credit.
b. your child in a qualifying child for purposed of the child tax credit.
c. your child is not a qualifying child for purposes of the child tax credit.
d. none of the above.

30. A qualifying child for purposes of the child tax credit does not have to live with you to qualify you.              

True False

31. Look at the Form 540A you prepared for Andy Brown. What is the amount on Form 540A, Line 11?

a. $ 1,270.
b. $ 976.
c. $ 1,070. 
d. None of the above.

32. Look at the Form 540A you prepared for Andy Brown. What is the amount on Form 540A, Line 66?

a. $ -0-.
b. $ 1,005.
c. $ 1,065. 
d. None of the above.