12. Individuals without children are eligible for the earned income credit if th
ID: 2385653 • Letter: 1
Question
12. Individuals without children are eligible for the earned income credit if they meet all thefollowing conditions except
A) file married filing separately.
B) at tax year end are at least age 25 but not more than age 64.
C) for the tax year are not a dependent of another taxpayer.
D) the United States is their principal place of residence for more than one-half of the tax year.
13. A taxpayer will be ineligible for the earned income credit if he or she has disqualified investment income of more than $3,150. Disqualified income includes all the following except
A) net capital gains.
B) tax-exempt interest.
C) net rental income.
D) self-employment income.
14. Max and Alexandra are married and incur $5,500 of qualifying expenses to care for their two children, ages 2 and 5. Max's earned income is $35,000 and Alexandra's earnings from a part-time job are $5,000. What is the amount of the qualifying expenses for purposes of computing the child and dependent care credit?
Explanation / Answer
12-The correct answer is A, file married filing separately. The question has three true selections and one false one. An individual who does not have a qualifying child for the tax year is an eligible individual if the individual’s principal place of abode is in the United States and for more than half the tax year he or she is in the U.S. Armed Forces assigned to duty outside the United States on extended active duty, and either the individual or the individual’s spouse, if any, is older than 24 but younger than 65 before the end of the tax year, the individual cannot be claimed as the dependent of another taxpayer for any tax year beginning in the same calendar year as the individual’s tax year, and the individual isn’t a nonresident alien for any part of the tax year, or has elected under code sec. 6013(g) or code sec. 6013(h) to be treated as a U.S. resident (code sec. 32(c)(1)(E) (Pub. 17, Chapter 36, page 235, “Rules If You Do Not Have a Qualifying Child”). 13-. The correct answer is D, self-employment income. A taxpayer with disqualified income over $3,150 cannot claim the credit . 14-5500
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