Qualified health insurance acquired through the Health Insurance Marketplace is reported to the taxpayer on Form 1095-A, Health Insurance Marketplace Statement. This form provides information about the health coverage, including the months coverage was in effect, the premium amounts, and any premium tax credits that were provided. Taxpayers use this information when filing their federal income tax returns to reconcile any premium tax credits they may claim.
Qualified health insurance through the Health Insurance Marketplace would be reported to the taxpayer on which form(s)?
9 answers
Mr. and Mrs. Baker are both under age 65. Mr. Baker is retired on permanent and total disability. Regarding the Credit for the Elderly or the Disabled, what is the adjusted gross income limit for a married filing jointly couple (both under age 65) with one qualifying spouse who passes the age or disability test?
$12,500 or more.
$17,500 or more.
$20,000 or more.
$25,000 or more.
$12,500 or more.
$17,500 or more.
$20,000 or more.
$25,000 or more.
For a married couple filing jointly where one spouse meets the age or disability test for the Credit for the Elderly or the Disabled, the adjusted gross income (AGI) limit is $25,000 or more. If their AGI is below this threshold, they may be eligible for the credit.
Adina is a single mother of two children, ages 6 and 8. She paid a neighbor to watch the children after school while she was at work. The total amount paid for the year was $6,000. Her adjusted gross income was $75,000. Her tax liability was $4,600. She received dependent care benefits (in box 10 of Form W-2) from her employer of $5,000. Assuming all other requirements are met, what is the amount of the Child and Dependent Care Credit she is allowed to claim on her 2023 tax return?
To calculate the Child and Dependent Care Credit that Adina can claim, we first need to consider the qualifying expenses, the dependent care benefits received, and the income limitations.
-
Qualifying Expenses: For two children, the maximum qualifying expenses are limited to $6,000.
-
Dependent Care Benefits: Since Adina received $5,000 in dependent care benefits from her employer, this amount must be subtracted from her qualifying expenses. Therefore, the qualifying expenses that she will be using to calculate the credit are: \[ $6,000 (total qualifying expenses) - $5,000 (dependent care benefits) = $1,000 \]
-
Credit Calculation: The Child and Dependent Care Credit is based on a percentage of the qualifying expenses, which varies based on income. For adjusted gross income (AGI) of $75,000, the percentage is typically 20% to 35% of qualifying expenses. For AGIs over $15,000, the credit percentage is usually 20%.
Therefore, the allowed percentage for Adina's $1,000 in qualifying expenses is 20%: \[ 20% \times $1,000 = $200 \]
Thus, the amount of the Child and Dependent Care Credit that Adina can claim on her 2023 tax return is $200.
The Mortgage Interest Credit is a credit intended to help lower-income individuals own a home. All the following statements about this credit are true, EXCEPT:
The credit is available to taxpayers who have a qualified Mortgage Credit Certificate (MCC) issued by a state or local government unit or agency under a qualified mortgage credit certificate program.
The credit is refundable.
The credit is taken on Form 8396, Mortgage Interest Credit.
The home must be the main residence of the taxpayer and must also be located in the jurisdiction of the government unit that issued the certificate.
The credit is available to taxpayers who have a qualified Mortgage Credit Certificate (MCC) issued by a state or local government unit or agency under a qualified mortgage credit certificate program.
The credit is refundable.
The credit is taken on Form 8396, Mortgage Interest Credit.
The home must be the main residence of the taxpayer and must also be located in the jurisdiction of the government unit that issued the certificate.
The statement that is not true regarding the Mortgage Interest Credit is:
The credit is refundable.
The Mortgage Interest Credit is non-refundable, meaning it can reduce your tax liability to zero, but you cannot receive a refund for any amount beyond your tax liability. If your tax liability is less than the amount of the credit, you will not receive the excess as a refund.
All the other statements regarding the Mortgage Interest Credit are accurate.
Amos and Talia adopted a child with special needs in a domestic adoption. They had $5,500 in qualified adoption expenses in 2023, and the adoption was finalized on December 18, 2023. They have not taken a credit for this adoption in a prior year. Their modified adjusted gross income is $210,000. Assuming all requirements are met, what is the maximum adoption credit they can claim in 2023?
For the year 2023, the maximum adoption tax credit per child is $15,950 for qualified adoption expenses. However, this credit begins to phase out for taxpayers with modified adjusted gross income (MAGI) above certain thresholds.
In 2023, the adoption tax credit begins to phase out for modified adjusted gross incomes over $223,410. Since Amos and Talia have a MAGI of $210,000, which is below the phase-out threshold, they are eligible to claim the maximum credit amount.
Given that they incurred $5,500 in qualified adoption expenses and the maximum credit they can claim is $15,950, their eligible adoption credit will be limited to the actual qualified expenses they incurred, which is $5,500.
**Therefore, the maximum adoption credit Amos and Talia can claim in 2023 is $5,500.