Tax Section 6 - California Credits and Other Credits

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Section 6 - California Credits and Other Credits

Use the IRS California 540/540A Booklet to complete this section of the assignment.

A. $840.
B. $420.
C. $1,428.
D. $714.

2. I want to file my return and have no tax liability. If I claim the child and dependent care expenses credit, would I still get a refund for California based on my Child and dependent Care expenses credit?

A. Yes, tax liability can be zero, and you can still qualify because for California credit is refundable.
B. No, the amount of credit is limited to the amount of tax liability and is non-refundable.
C. No, even if you have tax, the child and dependent care credit would not cancel it and thus there is no reason to claim it.
D. No, California does not have a Child and Dependent Care Expenses Credit.

3. Juan and Maria Escobedo are married and keep up a home for their two pre-school children. In tax year 2009, they claimed their children as dependents. Juan earned $25,200 and Maria earned $8,200. They paid $5,900 in work related child care expenses. What is their credit?

A. $1,475.
B. $737.50
C. $1,711
D. $738

4. To claim the Child and Dependent Care Expenses Credit for California, you must complete and attach to your California tax return the following:

A. Federal Form 2441 or Schedule 2.
B. FTB Form 3506.
C. Federal Form 3102 or Schedule 3.
D. Federal Form 2106 or Schedule C.

5. In tax year 2009, if your gross income is $45,000 and your federal child and dependent care expenses credit amount was $480, then your California Credit is

A. $206
B. $0
C. $240
D. $206.40

6. For Federal the child and dependent care expenses credit is a non-refundable credit and for California the credit is

A. Not allowed.
B. Amount of credit if is always greater than Federal credit.
C. The same as federal.
D. A refundable credit.

7. What is the percentage of the federal Child and Dependent Expenses Care credit that is allowed for California for taxpayers who earned more than $100,000 in 2009?

A. 42%
B. 50%
C. 63%
D. 0%

8. In tax year 2009, to qualify for the California child and dependent care expenses credit, your federal adjusted gross income must be less than

A. $40,000
B. $70,000
C. $100,000
D. $15,000

9. In tax year 2009, if you are head of household and you would like to qualify for renter's credit, you would not qualify if your income is over what amount?

A. $34,936
B. $68,824
C. $66,544
D. $100,000

10. If for more than half of the year, you lived in the home of a parent, foster parent, or legal guardian in 2009 who can claim you as a dependent, then

A. You do not qualify for the renter's credit.
B. You prepare a renter's qualification record and divide the credit accordingly.
C. You qualify to claim the credit because everyone in the household qualifies as long as you pay at least $1.00 of rent.
D. Since you are a dependent, you still qualify for $30 of renter's credit.

11. The non-refundable renter's credit qualification record must be kept with your records; therefore, you should not mail it.

12. To qualify for Renter's credit, you must have paid rent for at least 6 months of the tax year and your principal residence must have been in California.

13. If your filing status was married filing separate, you cannot claim the California renter's credit.

14. If a single employer withheld California State Disability Insurance (SDI) from your wages at more than 1.1% of your gross wages,

A. Contact the employer for refund.
B. Claim excess SDI on your Form 540/540A.
C. Contact the state of California for a refund.
D. You cannot get a refund because once W2 is filed it is too late.

15. You may be entitled to claim a credit for excess SDI on Form 540/540A if

A. You had two or more employers during 2009.
B. You received more than $90,669 in wages.
C. The amounts of SDI withheld appear on your forms W2.
D. All of the above

16. Federal law allows an exclusion of income from discharge of indebtedness from the disposition of your principal residence. Federal law limits the amount of qualified principal residence indebtedness to $2,000,000 ($1,000,000 for married filing separate). California partially conforms to the federal provisions for discharges on indebtedness occurring on or after January 1, 2009. California law limits the amount of qualified principal indebtedness to

A. $2,000,000 ($1,000,000 for married filing separate).
B. $500,000 ($250,000 for married/RDP filing separate).
C. $800,000 ($400,000 for married/RDP filing separate).
D. $400,000 ($250,000 for married/RDP filing separate).

17. For purposes of claiming the California Child and Dependent Care Expenses Credit, if your child turns age 13 during the year

A. The child is not a qualifying person because he has to have been under age 13 at the end of the year.
B. The child's age does not matter as long as he is your dependent.
C. The child is a qualifying person only for the part of the year he or she was 12 years old.
D. The child is not a qualifying child because the child has to be in pre-school.

18. In tax year 2009, my wife did not work all year because she was not able to care for herself for the entire year. I worked and earned $21,050. We have one qualifying child for the Child and Dependent care credit. We paid $2,000 for child care. How much credit can we qualify for?

A. $620
B. $310
C. $1,000
D. $744

19. You are single and only paid rent for one month in 2009. You qualify to claim the renter's credit.

20. For taxable years beginning in 2008 and 2009, California has suspended the net operating loss (NOL) carryover deduction.

21. If there is no difference between your federal and California income or deductions, do not file a Schedule CA (540).

22. Who is a qualifying individual for the Child and Dependent Care Credit?

A. A dependent of the taxpayer under 13 years of age.
B. A dependent of the taxpayer who is physically or mentally unable to care for him or herself.
C. Spouse of the taxpayer who is physically or mentally unable to care for him or herself.
D. Any of the above

23. One of the requirements to qualify to claim the Child and Dependent Care Credit for California is that

A. You paid for care so you (and your spouse/RDP) could work or look for work.
B. Your qualifying child is over 13 years of age just as long as he or she is not over 19.
C. Your adjusted gross income must be more than $100,000 for 2009.
D. You have no earned income for 2009.

24. For taxable years beginning on or after January 1, 2009, a new jobs credit against net tax will be allowed for a qualified employer in the amount of ______ for each qualified full-time employee hired during the taxable year that increases the employer's number of full-time employees over the previous year.

A. $1,500
B. $3,000
C. $10,000
D. $540

25. You qualify for the Nonrefundable Renter's Credit if you rented a property for more than half the year that was exempt from California property tax in 2009.

26. You may not claim the Credit for Dependent Parent if you used the single, head of household, qualifying widow (er), or married/RDP filing jointly filing status. Claim this credit only if

A. You were married/or an RDP at the end of 2009 and you used the married/RDP filing separately filing status.
B. Your spouse/RDP was not a member of your household during the last six months of the year.
C. You furnished over one-half the household expenses for your dependent mother's or father's home, whether or not she or he lived in your home.
D. All of the above

27. You may be entitled to claim a credit for excess SDI (or VPDI) only if more than _____ of your wages was over withheld from a single employer.

A. $100
B. $997.36
C. .08%
D. 1.1%

28. The 2009 SDI (or VPDI) limit is

A. $100,000
B. $997.36
C. $96,669
D. 1.1%

29. If you and your spouse/RDP paid joint estimated taxes but are now filing separate income tax returns, none of you may claim the entire amount paid.

30. Attach a doctor's statement to the back of Form 540/540A indicating your or your spouse/RDP are visually impaired every time you file a tax return to claim the blind exemption credit.

True False

31. Beginning on January 1, 2009, the dependent exemption credit decreased to ____ per dependent exemption.

A. $98.
B. $309.
C. $3,637.
D. $3,650.

32. For taxable years beginning on or after January 1, 2009, and before March 1, 2010, a home credit against net tax will be allowed for the purchase of a new or used home.

33. Your must file Form 540 if you have a tax liability for 2009 or owe

A. Tax on a lump-sum distribution.
B. Alternative minimum tax.
C. Tax on an accumulation distribution from a trust.
D. Any of the above.

34. You never received a Form W-2 and you asked your employer for one and employer refuses to issue a form, you should

A. Create a copy on your computer since you know wage and withholding information.
B. Complete form FTB 3525 with your wage and withholding information.
C. Not include this W-2 in your California tax return.
D. Any of the above

35. On your federal Schedule A (Form 1040), you may deduct ______ listed on your Vehicle Registration Billing Notice from the Department of Motor Vehicles.

A. Weight fees.
B. Country fees.
C. California motor vehicle fee.
D. All of the above.

36. If you didn't itemize deductions on your federal tax return it is possible to itemize deductions on your California tax return.

37. All domestic partners are required to file joint or separate returns under the new law.

38. Use form FTB 3519, Payment for Automatic Extension for individuals, only if

A. You cannot file your 2009 return by April 15, 2010 and you owe tax for 2009.
B. You cannot file your 2009 return by April 15, 2010.
C. You owe tax for 2009.
D. Either B or C above.

39. Treat a prior unsuccessful attempt to adopt a child (even when the costs were incurred in a prior year) and a later successful adoption of a different child as one effort when computing the cost of adopting the child. Include the following cost if directly related to the adoption process:

A. Fees for Department of Social Services or a licensed adoption agency.
B. Medical expenses not reimbursed by insurance.
C. Travel expenses for the adoptive family.
D. Any of the above.

40. Your California return can be transmitted to FTB only after you sign form FTB 8453 or form FTB 8879. The preparer or electronic e-file service must provide you with

A. A copy of form FTB 8453 or FTB 8879.
B. Any original Form(s) W2, W-2G, 592-B, 593, 1099-G, and other form (s) 1099 that you provided.
C. A paper copy of your California tax return showing the data transmitted to the FTB.
D. All of the above.