Question

1. Any unused child tax credit (due to not having enough tax liability) can be carried...

1. Any unused child tax credit (due to not having enough tax liability) can be carried forward and used in the next tax year. True False

2. Taxpayers must have some amount of earned income in order to take the earned income credit.

True

False

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Answer #1

Answer:

1. True

Reason: A tax credit is a dollar for dollar reduction of income tax you owe.

One of such tax credit incentives is child tax credit, This tax is applicable for the children of age 16 or below. Usually the child tax is non refundable if the credit exceeds the tax liability. But you can claim the additional child tax credit for the unused portion. This unused portion of credit can be carried forward for up to 5 years. Hence the answer is TRUE.

2. True

Reason: Earned income tax credit (EITC) is a refundable credit applied to workers who earn low or moderate incomes.

EITC is for earned income only. It has some income limits that are adjusted every year. So tax payers must have some amount of earned income in order to take the earned income credit. Hence the answer is TRUE.

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