Question

16.Which of the following statements about the child and dependent care credit is not true?

Group of answer choices

a.payments for dependent care services must be employment-related

b.the amount of the credit is not subject to phase-out based on the taxpayer’s adjusted gross income

c.the credit is for dependent care services is refundable

d. a credit of up to 35% may be claimed for certain child and dependent care expenses incurred as a result of an individual’s employment

17.In order for a taxpayer to be eligible for education credits, he/she or his/her dependent must be enrolled in a program leading toward a college degree.

Group of answer choices

True

False

18.

With regard to wage income:

Group of answer choices

a. employers pay all of the social security income directly, and employees pay the Medicare tax through withholding.

c. payroll taxes are only withheld if the employee specifically requests additional withholding.

d. employees never see any reporting of their payroll taxes because they are sent directly from the employer’s account to the IRS.

b. employers pay half of the payroll taxes (7.65%) directly, while employees pay the other half through withholding.

19.Compared to wage income, self-employment income:

Group of answer choices

d. is subject to SECA taxes which must be paid entirely by the taxpayer

a. is always subject to higher social security and Medicare taxes.

b. has a lower cap on social security and Medicare taxes.

c. offers no deductions for SECA tax paid.

20.The alternative minimum tax (AMT) is a tax system that runs parallel to the normal system, and is designed to impose penalties on middle and upper income taxpayers for excessive use of certain tax preferences.

Group of answer choices

True

False

Answer 1

Question 1 (16 per screen above):-

The correct answer is Option C - The credit for dependent care services is refundable. This statement is not true and hence is the correct answer. The Child and dependent care credit is generally a non refundable tax credit per IRS.

Option A is incorrect. The payments of dependent care services are generally employment related. The taxpayer should have earned income (wages) and if a taxpayer is married, they should have earned income in order to qualify for the credit.

Option B is incorrect. The amount of the credit is not subject to phase out, but rather the percentage of the credit that can be claimed , ranges from 20% - 35% based on the Taxpayers Adjusted Gross Income(AGI). As such, this statement is valid and hence is incorrect because it is true.

Option D is incorrect. The maximum percentage of credit that can be claimed for certain child and dependent care expenses incurred as a result of an individual's employment is 35% and hence this statement is true.

Kindly post the remaining questions separately so that we can answer them as well. All the best and please let me know if you have any questions via comments :)