1. Look at the Form 1040A you prepared for Lawrence and Theresa. What is the amount on Form 1040A, Line 28?

A. $2,026.
B. $2,019.
C. $2,011. 
D. $2,094.

2. Look at the Form 1040A you prepared for Lawrence and Theresa. What is the amount on Form 1040A, Line 29?

A. $0.
B. $1,000.
C. $700. 
D. $1,100.

3. For 2009, when you figure your credit for child and dependent care expenses, you can choose to include nontaxable combat pay and you can also figure your credit both ways and make the election if it gives you a greater tax benefit.                        

True False

4. For 2009, the amount of credit you can claim is limited to your regular tax (after reduction by any allowable foreign tax credit) plus your alternative minimum tax, if any.

True False

5. You cannot figure your credit for child and dependent care expenses using expenses for care while you were temporarily absent from work.                        

True False

6. To claim the credit for child and dependent care expenses, you (and your spouse if you are married) must have earned income during the year. Earned income includes

A. Wages, salaries, tips, and other taxable employee compensation and net earnings from self employment.
B. Strike benefits and any disability pay you report as wages.
C. Non-taxable combat pay if you elect to include it. 
D. Any of the above.

7. To provide lodging to the housekeeper, you move to an apartment with an extra bedroom. You

A. Cannot count the extra rent and utility expenses for the housekeeper's bedroom as work-related.
B. Can only count the extra utility expenses as work-related.
C. Can count the extra rent and utility expenses for the housekeeper's bedroom as work-related. 
D. None of the above

8. If you received dependent care benefits, your dollar limit for purposes on the credit may be reduced. Dependent care benefits are

A. Amounts your employer paid directly to either you or your care provider for the care of your qualifying person while you work.
B. Fair market value of care in a daycare facility provided or sponsored by your employer.
C. Pre-tax contributions you made under a dependent care flexible spending arrangement. 
D. All of the above.

9. If you are self-employed and receive benefits from a qualified dependent care benefit plan, you

A. Are treated as an employer.
B. Are treated as an employee.
C. Would get a deduction on Form 1040, Schedule C, Schedule E or Schedule F. 
D. All of the above

10. If you exclude dependent care benefits from your income, the amount of the excluded benefits

A. Is not included in your work-related expenses.
B. Reduces the dollar limit on the amount of your work-related expenses you can use to figure the credit.
C. Both A and B above. 
D. None of the above.

11. In 2008, Nathan and Cynthia had childcare expenses of $ 2,900 for their 12-year-old child. Of the $ 2,900, they paid $2,200 in 2008 and $ 700 in 2009. Their adjusted gross income for 2008 was $ 40,000. Sam's earned income of $16,000 was less that Kate's earned income. As a result,

A. A credit for their 2008 expenses paid in 2009 is not allowed in 2008, but it is allowed for 2009.
B. They must use their adjusted gross income for 2008 to compute the amount.
C. They must add $ 154 to their 2009 credit.  
D. All of the above.

12. If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer and you may be subject to

A. Social Security and Medicare taxes.
B. Federal unemployment tax.
C. Federal income tax withholding. 
D. All of the above.

13. If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer and you may be subject to

A. State unemployment tax.
B. Other state employment taxes.
C. Worker's compensation insurance. 
D. All of the above.

14. Disregard community property laws when you figure earned income for the child and dependent care expenses credit.                  

True False

15. You remarried on December 31. Your earned income for the year was $21,000. You new spouse's earned income for the year was $2,300. You paid work-related expenses of $3,000 for the care of your 8-year-old child and qualify to claim the credit. The amount of care expenses you can use to figure your credit is

A. $3,000.
B. $2,300.
C. $0
D. None of the above.

16. You pay $500 a month for the after-school care for your son for all of 2009. Your child turned 13 on June 1. How much of the expenses can you use to figure the credit?

A. $3,000.
B. $6,000.
C. $2,500. 
D. $2,517.

17. If you pay someone to care for your dependent in your home,

A. You may be a household employer
B. You may have to pay employment taxes
C. You can claim the credit for child and dependent care expenses 
D. All of the above

18. To claim the Child and Dependent Care Expenses Credit, you must file _________ for people who file Form 1040, or  _______ for people who file Form 1040A.

A. Form 2441; Form 2441.
B. Form 2441; Schedule 3.
C. Form 2606; Schedule C. 
D. Form 4029; Schedule SE.

19. The child and dependent care expenses must be for the care of one or more qualifying person such as

A. A child who is 18 years old.
B. Your dependent daughter who was under the age of 13 when care was provided.
C. Your parents who are perfectly able to care for themselves.
D. A person who does not live with you as long as they are one of the relatives that do not have to live with you to be claimed as a dependent.

20. Juan and Miriam Johnson are married filing jointly and keep up a home for their two pre-school children. In tax year 2009, they claimed their children as dependents. Juan earned $15,200 and Miriam earned $5,100. They paid $2,000 for each child in work related child care expenses. What is their credit amount?

A. $4,000.
B. $1,280.
C. $880. 
D. $0.

21. The work related expenses for the child and dependent care expenses care credit are expenses that

A. Allow you (and your spouse if you are married) to work or or look for work.
B. Are for the qualifying person's care.
C. Allow you to go on vacation from work.
D. Both A and B above.

22. If your spouse is a student or is not able to care for him or herself, he or she is treated as having earned income for any month that he or she is

A. A student that is attending full time only at night time.
B. Physically or mentally not able to care for him or herself or is a full time student.
C. Both A or B above
D. A partially disabled spouse capable of caring for him or herself.

23.  You paid work related expenses of $3,000 in tax year 2009. The state social services agency reimbursed you $2,000 for your work related child care expenses. Which of the following is correct?

A. Since you were reimbursed, you can't take the child and dependent care expenses credit.
B. You can use $2,000 to figure your credit.
C. You can use $1,000 to figure your credit.
D. You can use $3,000 to figure your credit.

24. There are many ways the taxpayer can show due diligence. Which of the following is correct as far as showing due diligence?

A. Get and keep the care provider's completed Form W-10.
B. A copy of the provider's completed Form W-4, Employer's withholding Allowance Certificate, if he or she is your household employee.
C. A copy of the provider's social security card. 
D. Any of the above.

25. To be able to claim the credit for child and dependent care expenses, you must file Form 1040 or Form 1040A, not Form 1040EZ. The following is not one of the tests that you must meet to claim the credit.

A. The care must be for one or more qualifying persons who are identified on the form you use to claim the credit.
B. The care can be to pay child and dependent care expenses so you (or your spouse if you are married) can have more freedom to do things you enjoy like play tennis.
C. Your filing status must be single, head of household, qualifying widow (er) with dependent child, or married filing jointly. You must file a joint return if you are married, unless an exception applies to you. 
D. You must identify the care provider on your tax return. If correct information is not shown, the credit may be reduced or disallowed.

26. You can count work-related payments you make to relatives who are not your dependents, even if they live in your home. You would not count payments to

A. A dependent for whom you (or your spouse if you are married) cannot claim an exemption.
B. Your child who was over age 19 at the end of the year. 
C. A person who was your spouse any time during the year, or the parent of your qualifying child.
D. Any of the above.

27. Child and dependent care expenses must be work-related to qualify for the credit. Expenses are considered work-related only if

A. Work-related expenses allow you (and your spouse) to work or look for work.
B. Work-related expenses are expenses for which you choose the least expensive way of providing care especially if another provider is available at no cost.  
C. Work-related expenses allow you (and your spouse) to go out more often.
D. All of the above. 

28. Do not count as work-related expenses amounts you pay for child and dependent care while you are

A. A full-time student if you are enrolled at and attend a school for the number of hours or classes that the school considers full time.
B. Working or looking for work.  
C. Off work because of temporary illness, if you had to pay for care anyways.
D. None of the above. 

29. To be work-related, your expenses must be to provide care for a qualifying person. You do not have to choose the least expensive way of providing the care. Expenses are for the care of a qualifying person only if their 

A. Main purpose include amounts you pay for food, clothing, education, and entertainment.
B. Main purpose is the person's well-being and protection.  
C. Main purpose is for qualifying person is to attend kindergarten or a higher grade level.
D. All of the above. 

30. Your child and dependent care expenses must be for the care of one or more qualifying persons. A qualifying person is your qualifying child who is your dependent and who was under age 13 when the care was provided, or

A. Your spouse who was physically or mentally not able to care for himself or herself and lived with you for more than half the year.
B. A person who was physically or mentally not able to care for himself or herself, lived with you for more than half the year and was your dependent.   
C. A person was physically or mentally not able to care for himself or herself, lived with you for more than half the year and would have been your dependent except that earned more than $3,650, filed jointly, or you or your spouse if filing jointly can be claimed on someone else's return. 
D. Any of the above.