Question

Marsha is 23 years old and single. She cannot be claimed as a dependent by another taxpayer. Marsha earned wages of $18,500 and had $1,500 of federal income tax withholding in tax year 2020. Marsha gave birth to Shelby on November 10, 2020. Marsha paid all the cost of keeping up a home and support for Shelby. Shelby and Marsha are U.S. citizens and have valid Social Security numbers. Marsha filed Single with no dependents on her 2019 tax return and received a $1,200 Economic Impact Payment in May 2020.

1. Which of the following statements is true?
a. Marsha is required to file a tax return.
b. Marsha is not required to file a tax return, but should file a tax return to claim a
refund of her federal income tax withholding.
c. Marsha does not qualify for the earned income credit because she is under the
age of 25.
d. Both a and c.
2. Marsha qualifies for the recovery rebate credit of $500 for Shelby.
Note: Congress may have enacted additional legislation that will affect taxpayers
after this publication went to print. Please answer questions based on the information
provided in Publication 4491, VITA/TCE Training Guide and Publication 4012, VITA/
TCE Resource Guide.
a. True
b. False

Answer 1

1. d. Both a and c.

2. True.

Step-by-step explanation:

Marsha and Shelby both are U.S. citizen. Marsha can claim Income credit once she is 25 years older up to 65 years of age. The individual below 25 years of age cannot claim income credit according to the tax law prevailing in U.S.