The credit for child and dependent care expenses is an example of a refundable credit.

Any unused general business credit must be carried back 3 years and then forward for 20 years.

The purpose of the tax credit for rehabilitation expenditures is to encourage the relocation of businesses from older, economically distressed areas (i.e., inner city) to newer locations.

The purpose of the tax credit for rehabilitation expenditures is to encourage the relocation of businesses from older, economically distressed areas (i.e., inner city) to newer locations.

Qualified rehabilitation expenditures include the cost of acquiring the building, but not the cost of acquiring the land.

The tax credit for rehabilitation expenditures for certified historic structures differs from that for qualifying structures that are not certified historic structures.

Some (or all) of the tax credit for rehabilitation expenditures will have to be recaptured if the rehabilitated property is disposed of prematurely or if it ceases to be qualifying property.

If a taxpayer is required to recapture any tax credit for rehabilitation expenditures, the recapture amount need not be added to the adjusted basis of the rehabilitation expenditures.

The purpose of the work opportunity tax credit is to encourage employers to hire individuals from specified target groups traditionally subject to high rates of unemployment.

Employers are encouraged by the work opportunity tax credit to hire individuals who have been long-term recipients of family assistance welfare benefits.

The work opportunity tax credit is available only for wages paid to qualifying individuals during their first year of employment.

An employer’s tax deduction for wages is affected by the work opportunity tax credit.

The incremental research activities credit is 20% of the qualified research expenses that exceed the base amount.

A small employer incurs $1,500 for consulting fees related to establishing a qualified retirement plan for its 75 employees. As a result, the employer may claim the credit for small employer pension plan startup costs for $750.

Realizing that providing for a comfortable retirement is up to them, Jim and Julie commit to making regular contributions to their IRAs, beginning this year. Consequently, they each make a $2,000 contribution to their traditional IRA. If their AGI is $35,000 on their joint return, what is the amount of their credit for certain retirement plan contributions?

Bob and Sally are married, file a joint tax return, have AGI of $112,000, and have two children. Del is beginning her freshman year at State College during Fall 2014, and Owen is beginning his senior year at Southwest University during Fall 2014. Owen completed his junior year during the Spring semester of 2013 (i.e., he took a “leave of absence” during the 2013-2014 school year). Both Del and Owen are claimed as dependents on their parents’ tax return. Del’s qualifying tuition expenses and fees total $5,000 for the Fall semester, while Owen’s qualifying tuition expenses were $6,100 for the Fall 2014 semester. Del’s room and board costs were $3,200 for the Fall semester. Owen did not incur room and board costs since he lived with his aunt and uncle during the year. Full payment is made for the tuition and related expenses for both children at the beginning of each semester. In addition to the children’s college expenses, Bob also spent $3,000 on professional education seminars during the year in order to maintain his license as a practicing dentist. Bob attended the seminars during July and August 2014. Compute the available education tax credits for Bob and Sally for 2014.

Realizing that providing for a comfortable retirement is up to them, Jim and Julie commit to making regular contributions to their IRAs, beginning this year. Consequently, they each make a $2,000 contribution to their traditional IRA. If their AGI is $35,000 on their joint return, what is the amount of their credit for certain retirement plan contributions?

Jermaine and Kesha are married, file a joint tax return, have AGI of $82,500, and have two children. Devona is beginning her freshman year at State University during Fall 2014, and Arethia is beginning her senior year at Northeast University during Fall 2014 after having completed her junior year during the spring of that year. Both Devona and Arethia are claimed as dependents on their parents’ tax return. Devona’s qualifying tuition expenses and fees total $4,000 for the fall semester, while Arethia’s qualifying tuition expenses and fees total $6,200 for each semester during 2014. Full payment is made for the tuition and related expenses for both children during each semester. The American Opportunity credit available to Jermaine and Kesha for 2014 is:

Which of the following statements concerning the credit for child and dependent care expenses is not correct?

George and Jill are husband and wife, ages 67 and 65 respectively. During the year, they receive Social Security benefits of $4,000 and have adjusted gross income of $11,000. Assuming they file a joint return, their tax credit for the elderly, before considering any possible limitation due to their tax liability, is:

During 2014, Barry (who is single and has no children) earned a salary of $13,000. He is age 30. His earned income credit for the year is:

Cheryl is single, has one child (age 6), and files as head of household during 2014. Her salary for the year is $19,500. She qualifies for an earned income credit of the following amount:

Amber is in the process this year of renovating the office building (originally placed in service in 1976) used by her business. Because of current Federal Regulations that require the structure to be accessible to handicapped individuals, she incurs an additional $11,000 for various features, such as ramps and widened doorways, to make her office building more accessible. The $11,000 incurred will produce a disabled access credit of what amount?

In March 2014, Gray Corporation hired two individuals, both of whom were certified as long-term recipients of family assistance benefits. Each employee was paid $11,000 during 2014. Only one of the individuals continued to work for Gray Corporation in 2015, earning $9,000 during the year. No additional workers were hired in 2015. Gray Corporation’s work opportunity tax credit amounts for 2014 and 2015 are:

In the current year, 2014, her business generates an additional $15,000 general business credit. In 2014, based on her tax liability before credits, she can utilize a general business credit of up to $20,000. After utilizing the carryforwards and the current year credits, how much of the general business credit generated in 2014 is available for future years?

Refundable tax credits include the:

 Ahmad is considering making a $10,000 investment in a venture which its promoter promises will generate immediate tax benefits for him. Ahmad, who normally itemizes his deductions, is in the 28% marginal tax bracket. If the investment is of a type where the taxpayer may claim either a tax credit of 25% of the amount of the expenditure or an itemized deduction for the amount of the investment, what treatment normally would be most beneficial to Ahmad and by how much will Ahmad’s tax liability decline because of the investment?

Roger is considering making a $6,000 investment in a venture that its promoter promises will generate immediate tax benefits for him. Roger, who does not anticipate itemizing his deductions, is in the 30% marginal income tax bracket. If the investment is of a type that produces a tax credit of 40% of the amount of the expenditure, by how much will Roger’s tax liability decline because of the investment?