- Which of the following correctly describes the credits Marcus may claim for Theo on his 2025 return?
Answer: He may claim the earned income credit with Theo as a qualifying child and a $500 credit for other dependents, but no child tax credit.
Governing authority: IRC §§ 24 and 32. Theo is Marcus's qualifying child for the earned income credit: he is Marcus's brother, a full-time student under age 24 who is younger than Marcus, and he lived with Marcus for the whole year. He is not a qualifying child for the child tax credit because he is not under age 17. Because he is Marcus's dependent but not a child tax credit qualifying child, Marcus may claim the $500 credit for other dependents, which is nonrefundable and fits within his $738 of tax. Choice C is correct. Choice A omits the credit for other dependents. Choice B treats a full-time student as qualifying for the child tax credit. Choice D applies the wrong age rule to the earned income credit.
- What is the total amount Elena and Sofia may claim for the child tax credit and the credit for other dependents on their 2025 return?
Answer: $2,700
IRC §§ 24(a) and (h) and 152(d). Marco, age 10, is a qualifying child for the child tax credit, which is $2,200 for 2025. Lucia, age 18, is a dependent who is not eligible for the child tax credit because she is not under age 17, so she qualifies for the $500 credit for other dependents. Carmen is a qualifying relative: her gross income of $4,200 is below the 2025 limit of $5,200, Elena and Sofia provide more than half of her support, and she does not file a joint return; she also qualifies for the $500 credit for other dependents. The three credits total $3,200. Because modified adjusted gross income of $409,500 exceeds the $400,000 joint-return threshold by $9,500, the combined credit is reduced by $50 for each $1,000 (or fraction) of the excess: 10 × $50 = $500, leaving a credit of $2,700. The full credit is allowed because the tax liability of $5,400 exceeds it. Choice B omits the phase-out reduction. Choice C counts only Marco's $2,200 credit and ignores both $500 credits and the phase-out. Choice D results from applying the $200,000 unmarried-taxpayer phase-out threshold to a joint return; the $209,500 excess would reduce the credit by $10,500, wiping it out.
- What total child tax credit, including any additional child tax credit, may Dan claim for 2025?
Answer: $2,100
IRC § 24(a) and (d). For 2025, the base child tax credit is $2,200 per qualifying child. Dan's $95,000 MAGI is below the $200,000 phase-out threshold for single taxpayers, so his tentative credit is $2,200. The nonrefundable portion is limited to the $600 remaining tax. The excess of the tentative credit over tax is $1,600, but the additional child tax credit is limited to 15% of earned income over $2,500: 0.15 × ($12,500 − $2,500) = $1,500. This is below the $1,700 per-child maximum, so the refundable amount is $1,500. Total credit: $600 + $1,500 = $2,100. Choice A ($2,000) reflects the pre-2025 $2,000 child tax credit amount. Choice C ($2,200) treats the full tentative credit as allowable and ignores the earned-income limitation on the additional child tax credit. Choice D ($2,300) treats the $1,700 per-child ceiling as a flat refundable amount, overstating the refundable portion and exceeding the tentative credit.
- What is the total of the child tax credit and credit for other dependents that Vera and Paul may claim for 2025?
Answer: $2,400
IRC § 24(a) and (h). For 2025, the child tax credit is $2,200 for a qualifying child under age 17, and the credit for other dependents is $500. Sophia generates $2,200. Liam, age 17, is not a qualifying child for the child tax credit, but as a dependent he generates $500. The combined credit before phase-out is $2,700. The phase-out reduces the combined credit by $50 for each $1,000 or fraction of MAGI over $400,000 for joint filers. MAGI of $405,300 is $5,300 over the threshold, which counts as six $1,000 increments, so the reduction is $300. Result: $2,700 − $300 = $2,400. Choice B ($2,450) counts only five increments and ignores the $300 fraction. Choice C ($2,700) ignores the phase-out entirely. Choice D ($4,100) treats Liam as a qualifying child for the $2,200 child tax credit and applies the phase-out: $4,400 − $300 = $4,100.
- Which of the following is correct regarding the earned income credit for 2025?
Answer: A taxpayer whose investment income is $12,500 may not claim the earned income credit, regardless of the number of qualifying children the taxpayer has.
IRC § 32(a) and (i). The earned income credit is denied entirely when a taxpayer's investment income exceeds $11,950 for 2025, and this investment-income test applies without regard to the number of qualifying children. Choice A is correct. Choice B is wrong because investment income of $12,500 exceeds the $11,950 ceiling, so the credit is denied even for a taxpayer with three or more qualifying children. Choice C is wrong because a taxpayer with no qualifying children must have a main home in the United States for more than half the year; living in the United States for any part of the year does not satisfy the test. Choice D is wrong because the age test for an earned income credit qualifying child is under age 19, or under age 24 for a full-time student, or any age if permanently disabled; under age 17 is the age test for the child tax credit.
- Which of the following is correct for 2025?
Answer: Liam may claim the child tax credit, but Marisol may claim the earned income credit with the daughter as her qualifying child.
Governing authority: IRC §152(e), §§24 and 32. A Form 8332 release lets the noncustodial parent claim the dependency exemption and, because the child is under 17, the child tax credit. The release does not transfer the earned income credit; the earned income credit requires the child to have lived with the claimant for more than half the year, and the daughter lived with Marisol. Choice B gives the earned income credit to Liam. Choice C reverses the child tax credit result. Choice D overlooks Marisol's ability to claim the earned income credit.
- What amount of their 2025 child and dependent care expenses may Dana and Owen use to compute the child and dependent care credit?
Answer: $2,000
Governing authority: IRC §21(c). The child and the disabled father are both qualifying individuals, so the work-related expenses are first limited to $6,000 and then reduced by the $4,000 of excluded dependent care benefits, leaving $2,000. Choice B subtracts the benefits before applying the $6,000 cap. Choice C applies the cap but ignores the dependent care benefits. Choice D ignores both the cap and the benefits.
- Which of the following is correct regarding Nina's eligibility for the earned income credit for 2025?
Answer: She may not claim the credit because her investment income exceeds the $11,950 limit.
Governing authority: IRC §32(i). The earned income credit is unavailable when investment income exceeds $11,950. Investment income includes taxable interest and tax-exempt interest, so Nina's investment income is $13,000. Choice A ignores the investment income rule even though municipal bond interest is indeed exempt from regular federal income tax. Choice C is wrong because the investment income limit applies whether or not the taxpayer has a qualifying child. Choice B is wrong because the one-child earned income amount for 2025 is $12,730; earned income below that amount still produces a positive credit, and Nina's daughter qualifies her for the credit.
- Which of the following is correct regarding the amount of the child and dependent care credit for 2025?
Answer: The credit is 35% of qualifying work-related expenses, up to $3,000 for one qualifying person or $6,000 for two or more, and the percentage is reduced by one percentage point for each $2,000 (or fraction thereof) of adjusted gross income over $15,000, but not below 20%.
IRC § 21 sets the 2025 child and dependent care credit at 35% of qualifying work-related expenses, up to $3,000 for one qualifying person or $6,000 for two or more. The 35% rate is reduced by one percentage point for each $2,000 (or fraction thereof) of adjusted gross income above $15,000, but not below 20%. Choice A states the rate reduction and the expense caps correctly. Choice B invents a 30% floor for taxpayers with two or more qualifying persons; the statutory floor is 20% in every case. Choice C uses the 50% maximum rate that the One Big Beautiful Bill Act makes effective for tax years beginning after 2025; for 2025 the maximum rate remains 35%. Choice D substitutes $5,000 and $10,000 for the statutory expense caps of $3,000 and $6,000.
- Which of the following is correct regarding the additional child tax credit for 2025?
Answer: The credit is the amount of the child tax credit that remains after the credit is applied against the taxpayer's tax liability, and it is limited to 15% of the taxpayer's earned income above $2,500, with a maximum of $1,700 for each qualifying child.
IRC § 24(d). The additional child tax credit is the refundable part of the child tax credit. It is the lesser of the credit left after it is applied against the taxpayer's tax liability and 15% of the taxpayer's earned income above $2,500, and for 2025 it may not exceed $1,700 for each qualifying child. Choice A is correct. Choice B is wrong because the additional child tax credit is capped at $1,700 per qualifying child for 2025 and is available for any number of qualifying children; for taxpayers with three or more qualifying children, § 24(d)(1)(B)(ii) only provides an alternative computation based on social security taxes paid. Choice C is wrong because the earned-income threshold is $2,500, not $3,000, and the refundable ceiling is $1,700 per child, not the $2,200 full credit amount. Choice D is wrong because it drops the earned-income limitation; the refundable amount is limited to 15% of earned income above $2,500.
- Which of the following is correct regarding eligibility for the child tax credit for 2025?
Answer: The credit is $2,200 for each qualifying child under age 17; the child must have a valid Social Security number, and spouses filing jointly may claim the credit if at least one spouse has a valid Social Security number and the other spouse has an ITIN.
IRC § 24, as amended by the One Big Beautiful Bill Act (P.L. 119-21, § 70104). For 2025 the child tax credit is $2,200 for each qualifying child under age 17. The child must have a valid Social Security number. On a joint return, at least one spouse must have a valid Social Security number; the other spouse may hold an ITIN. Choice A states the 2025 amount and both identification-number rules correctly. Choice B misstates the spousal rule: the law requires a Social Security number for only one spouse filing jointly, and the other spouse may hold an ITIN. Choice C is wrong on both points: a child with only an ITIN cannot be counted for the child tax credit, and spouses filing jointly do not each need a Social Security number. Choice D uses the pre-2025 amount of $2,000 per child; the 2025 amount is $2,200.
- What amount may Delia claim as a child tax credit and credit for other dependents for 2025?
Answer: $1,000
Governing authority: IRC §24. The child tax credit requires a qualifying child under age 17 with a valid Social Security number. The 17-year-old son fails the age test; the 16-year-old niece fails the Social Security number test because she has an ITIN. Each is a dependent not eligible for the child tax credit, so each generates the $500 credit for other dependents, for a total of $1,000. Choice B treats the ITIN child as a child tax credit child and claims only the son's other dependent credit. Choice C counts the ITIN child as a child tax credit child and ignores the son. Choice D counts only one of the two other dependent credits.
- What combined amount may Priya and Marcus claim for the child tax credit and the credit for other dependents for 2025?
Answer: $4,750
Governing authority: IRC § 24. The tentative credits are $4,400 (two qualifying children × $2,200) plus $500 for the mother, or $4,900. The phaseout reduces the combined credit by $50 for each $1,000 or part of modified AGI over $400,000; $402,100 exceeds the threshold by $2,100, which counts as three increments, so the reduction is $150. The combined credit is $4,750, and because the $14,000 tax liability exceeds that amount, the entire credit is allowed. Choice A applies no phaseout. Choice C counts only the two full $1,000 increments and ignores the remaining $100 part. Choice B applies the $150 reduction separately to each dependent's credit; the phaseout applies once to the combined credit.
- What amount of the additional child tax credit may Rosa claim for 2025?
Answer: $1,700
Governing authority: IRC §24(d). Rosa's tentative child tax credit is $2,200. The $300 tax liability consumes $300 of it as a nonrefundable credit, leaving $1,900. The additional child tax credit is the smaller of that $1,900, 15% of earned income over $2,500 (15% × ($18,750 - $2,500) = $2,437.50), and the 2025 per-child refundable cap of $1,700, so the refundable amount is $1,700. Choice A reflects only the nonrefundable portion. Choice C is the remainder before the $1,700 per-child cap is applied. Choice D is the tentative credit before applying the tax-liability and per-child limits.
- What amount of her 2025 child care payments may Helena take into account in computing the child and dependent care credit?
Answer: $2,400
IRC § 21(b)(1)(A) and (c). A qualifying child for the child and dependent care credit must be under age 13 when the care is provided. Helena's child was under 13 only from January through June, so only the $2,400 paid for those months is for a qualifying individual. The $2,400 paid from July through December is not eligible because the child was 13 when the care was provided. The annual expense limit for one qualifying child is $3,000, so the full $2,400 may be taken into account. Choice A ($0) would result from measuring the child's age at the end of the year; the credit looks to the child's age on the dates care is provided. Choice C ($3,000) counts all payments and applies the $3,000 limit, but payments made after the child's 13th birthday are not eligible at all. Choice D ($4,800) counts the entire year's payments and ignores both the qualifying age requirement and the expense limit.
