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Chapter 5 Study Questions Test MNB4
Which of the following credits is a nonrefundable credit?
Select one:
a. Earned income credit
b. Foreign Tax Credit Correct. The foreign tax credit is a nonrefundable credit
as determined by the IRS.
c. Excess Social Security withheld
d. Child tax credit
Which of the following is the most accurate statement regarding who can claim the
earned income credit in 2021?
Select one:
a. Only taxpayers who have earned income and investment income only
b. Only taxpayers who have earned income, with or without children
Correct. The earned income credit is a refundable credit available to taxpayers
with earned income, and with or without children.
c. Only taxpayers who have no children
d. Only taxpayers who have children
All of the following are examples of earned income except:
Select one:
a. Wages, salaries, and tips
b. Net earnings from self-employment
c. Unemployment compensation Correct. Unemployment compensation is not
considered earned income for purposes of the earned income credit.
d. Gross income received as a statutory employee
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