ExpertHard1 markMultiple Choice
CPA · Question 56 · Area IV: Individual Taxation
Which of the following credits can result in a refund even if the taxpayer has no income tax liability?
Which of the following credits can result in a refund even if the taxpayer has no income tax liability?
Answer options:
A.
Adoption Credit
B.
Earned Income Tax Credit (EITC)
C.
Credit for the Elderly or the Disabled
D.
General Business Credit
How to approach this question
EITC is the classic refundable credit.
Full Answer
B.Earned Income Tax Credit (EITC)✓ Correct
The Earned Income Tax Credit (EITC) is a refundable credit, meaning it can generate a refund in excess of tax liability.
Common mistakes
Thinking the Adoption credit is refundable.
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