Question

If the cumberlands took the lifetime learning credit, and lori also had income of $71,000, what would be the nonrefundable portion of that credit?

O $2,500
O $2,000
O $1,500
O $0

Answer 1

Lori with an income of $71,000 would receive $0 as the nonrefundable portion of the Lifetime Learning Credit because her income exceeds the threshold for the phase-out of the credit.

Step-by-step explanation:

The nonrefundable portion of the Lifetime Learning Credit for Lori with an income of $71,000 would be $0. The Lifetime Learning Credit phase out starts at $67,000 for single filers in 2020 and is completely phased out at $80,000. Therefore, Lori's income is too high to benefit from the credit.

The Earned Income Tax Credit (EITC) is a separate credit designed to assist low- to moderate-income working people, especially those with children. The amount of the credit increases with the amount of income earned up to a point. For example, in 2013, a single parent with two children could receive a maximum EITC credit until their income reached $17,530, after which the credit would phase out slowly.