Earned Income Credit

Question 1

which of the following types of income are not considered earned income?

Answer 1

Unemployment compensation.

Question 2

Which of the following taxpayers may qualify for the Earned Income Tax Credit (EITC)?

Answer 2

Layla, who is 63, files Single, and has $14,000 in wage income and $2,000 in Social Security.

Question 3

eitc chart

Answer 3

EITC credit amounts for tax year 2023
Dependents Claimed

Single, HOH, or QSS

MFJ

Zero

$17,640

$24,210

One

$46,560

$53,120

Two

$52,918

$59,478

Three

$56,838

$63,398

Question 4

For purposes of the Earned Income Tax Credit, a “qualifying child” is a child who: (please choose the best answer).

Answer 4

Meets the relationship test.

Question 5

To qualify for the Earned Income Tax Credit, which of the following is required?

Answer 5

the taxpayer must be a U.S. citizen or legal U.S. resident all year.

Question 6

What is the earliest date that Farrah’s tax refund can be released, assuming she e-files her return as soon as possible at the beginning of the year?

Answer 6

February 15.The PATH Act mandates that the IRS not issue a refund on tax returns claiming the Earned Income Tax Credit until Feb. 15.

Question 7

Which of the following types of income would be considered “earned income” for the purposes of claiming the Earned Income Tax Credit?

Answer 7

Disability retirement benefits received before the minimum retirement age.Some disability retirement benefits qualify as earned income for purposes of eligibility for the EITC. The IRS considers disability retirement benefits as “earned income” until you reach the minimum retirement age. However, benefits such as Social Security Disability Insurance, SSI, or military disability pensions are not considered earned income and cannot be used to claim the EITC.