Individual Taxation 3 of 5 (3)

Question 1

Qualifying Child

Answer 1

• No Joint Return w/ spouse, unless filing only to get a refund.
• Age – Unless disabled, child must be:
  
  • Under age 19, or 24 if a full-time student for at least 5 months of the year, and
  • Younger than the taxpayer or spouse.
• Relationship – Taxpayer’s child, stepchild, foster child, sibling, step sibling, half sibling, or a descendant of any such individual.
• Residency – Child must live with the taxpayer more than half the year in the U.S.
• Support – Child must NOT have provided more than 50% of their own support, not including scholarships.

Question 2

Qualifying Relative

Answer 2

A dependent Relative of the taxpayer, or someone who lived with the taxpayer for the entire year, provided certain qualifications are met (Nicolas Cage Insulted Steve Jobs):

1. Not a qualifying child of another taxpayer.
2. Citizen of U.S., or resident of the U.S., Canada, or Mexico.
3. Income for the year less than $4,200 for 2019.
4. The taxpayer provided more than half of the cost of Support.
5. Joint return not being filed.

Question 3

Nonrefundable Tax Credits

Answer 3

Tax credits that may be used to reduce taxes and, when in excess of the tax liability, may be carried back or forward, depending on the provisions of the credit, but may not reduce the tax liability below zero. Examples include:

• Dependent Care Credit
• Lifetime Learning credit
• Credit for Elderly or Disabled
• Family Tax Credit
• Foreign Tax Credit
• Retirement Savings Credit
• Adoption Credit

Question 4

Refundable Tax Credits

Answer 4

Tax credits that may be used to reduce taxes and, when in excess of the tax liability, may reduce the tax liability below zero, resulting in a refund to the taxpayer. Examples include:

• Earned Income Credit (EIC)
• Additional Child Tax Credit
• American Opportunity Credit (40%)