Chapter 11: Additional Child Tax Credit & EITC
True
Child Tax Credit can reduce the taxpayer's tax liability to $0.
False
Child Tax Credit is refundable.
False
Due Diligence for ACTC means fulfilling three requirements: 1) Complete and keep copies of all worksheets used to compute the credits, 2) Satisfy the knowledge requirement, 3) Satisfy the documentation requirement.
True
For the purpose of determining Additional Child Tax Credit, nontaxable combat pay is considered earned income.
True
Investment Income Limitation for EITC includes Interest from Tax Exempt Investments.
True
Investment Income Limitation for EITC includes income from passive income.
True
Investment Income Limitation for EITC includes rental income
True
Nontaxable Combat Pay, reported in W-2, box 12, code Q, is treated as Earned Income to qualify for EITC
True
Taxable Disability Benefits from employer's disability retirement plan is treated as earned income to qualify for EITC.
False
There is a $500 penalty against the preparer for failure to meet the due diligence requirements for each of EITC, AOTC, CTC/ACTC, on each return.
True
A taxpayer with at least one qualifying child may claim up to 15% of the amount by which earned income exceeds $3000.
False
A taxpayer with more than 3 or more qualifying children and has a total of social security and medicare tax withholding that exceeds their Earned Income may be able to claim Additional Child Tax Credit higher than than the $1000 per child limit.
False
Additional Child Tax Credit is a nonrefundable credit.
True
Additional Child Tax Credit is a refundable credit.
False
Additional Child Tax Credit is worth up to $2000 per child for 2017 tax year.
True
Additional Child Tax Credit may increase the taxpayer's refund.
False
Additional Child Tax Credit may reduce taxable income.
True
To calculate Additional Child Tax Credit, no worksheet is required.
True
To claim ACTC, Form 8867 must be, not only filled out, but submitted along with your tax return.
False
To claim Additional Child Tax Credit, you must have at least 3 qualifying children.
True
You can leave some questions blank on Form 8867.