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Josey's tax liability is zero. She is getting a refund of $225, without any credits being applied, all from her federal income tax withheld. Assuming she otherwise qualifies, which of the following credits might actually increase her refund amount?

1) Adoption credit
2) Child and dependent care credit
3) Credit for other dependents
4) Earned income credit

User Yanike
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1 Answer

6 votes

Final answer:

The credits that could potentially increase Josey's refund are the Adoption Credit, Child and Dependent Care Credit, Credit for Other Dependents, and the Earned Income Credit (EIC).

Step-by-step explanation:

The earned income tax credit (EITC) is a government program designed to assist low-income individuals and families. The EITC provides a tax credit for families based on their income and number of children. In the given scenario, Josey's refund is solely from her federal income tax withheld, and she is not receiving any other credits.

However, if Josey qualifies for additional credits, such as the Adoption Credit, Child and Dependent Care Credit, or Credit for Other Dependents, these credits could potentially increase her refund amount.

For example, the Adoption Credit provides a credit for qualified adoption expenses, which can reduce an individual's tax liability. The Child and Dependent Care Credit provides a credit for expenses incurred for the care of a child or dependent, which can also reduce tax liability. The Credit for Other Dependents provides a credit for individuals who have dependents that do not qualify for the Child Tax Credit.

Furthermore, the Earned Income Credit (EIC) could also increase Josey's refund if she qualifies for it. The EIC is aimed at supporting low-income individuals and families, and it is based on income, filing status, and number of children. It is possible that Josey's income and circumstances may make her eligible for the EIC, which could further increase her refund amount.

It is important to note that each credit has eligibility criteria and limitations, so it's recommended to consult a tax professional or refer to the relevant IRS publications for detailed information on each credit and how they may apply to Josey's situation.

User Pabloxio
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