Question

Basic Scenario 1: Jeff and Linda Arnold Interview Notes .Jeff and Linda got married in December of 2018. They are both U.S. citizens with valid Social Security numbers. They do not elect to file a joint return for 2018. Jeff worked all year and received wages of $32,000. He received full health insur- ance coverage from his employer all year. Linda worked part-time at a book store January through September. She earned $9,000 for the year. In November, she started working at the library. She had health insurance through her employers, except for the month of October when she was unemployed Basic Scenario 1: Test Questions 1. Jeff may need to make a shared responsibility payment. a. True b. False 2. Linda does not need to make a shared responsibility payment because she quali- fies for an exemption under the short coverage gap criteria. a. True b. False

Answer 1

Answers:

1. False

Jeff need not make shared payments as Linda was uncovered for only 1 month. Therefore , she got exemption for short gap coverage (less than 3 months).

2. True

As Linda was uncovered for only 1 month of the year she got exemption for short gap coverage and thus, need not make any shared responsibility payments .

3. False, attendence at school is considered as temporary absence and this time is counted as time that her child lived with her.

Ava can claim her son's earned income credit as he is eligible as a qualified child (less than 24 years and full time student). Moreover he is also a US resident with SSN.

For the purpose of residency test, to claim, David should have lived more than half year in Ava's home. Here, David lived in campus and comes to home in summer. Living in campus is deemed as lived with Ava itself (also , she makes tution and accommodation payments).

4. a. Head of Household filing status

Inorder to file a return as head of household you must have a qualifying child or dependent. Here, David is Ava's qualified child.

5. c. $ 18,000

It has been more than 2 years since her spouse has died and so she cannot file return as a qualified widower inspite of whether she remarried or not.

Here, Ellen can file return as either Single or Head of Household. Since, she has dependents she will file return as Head of household and can claim $ 18,000 as standard deduction.

6. c. $ 1,400

Additional child tax credit is the refundable portion of child tax credit.

Here, Ellen's income is $ 28,500. 15% of over $ 3,000 is $ 3,825 which is more than child tax credit of $ 2,000 . The maximum amount of additional child tax credit is limited to $ 1,400 in 2018.

7. No, because Christopher and Amanda both have ITINs.

Inorder to claim EIC in 2018, married couples resident in US should have joint income less than 46,010 with 1 qualifying child and valid SSN.

Here, Christopher and Amanda have ITIN not valid for claiming EIC.

8. d. Both a and b ( Child and dependent care credit and child tax credit )

Christopher and Amanda have paid their daycare care provider to care for their qualifying child who is under 13 years of age. So, they are eligible to claim child and dependent care credit in their return for 2018. Also, they qualify criterias for claiming child tax credit.