question archive Interview Notes Barbara is age 54 and was widowed in 1999
Interview Notes Barbara is age 54 and was widowed in 1999
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Interview Notes
- Barbara is age 54 and was widowed in 1999. She owns her own home and provided all the cost of keeping up her home for the entire year. Her only income for 2020 was $29,000 in W-2 wages.
- In January of 2020, Barbara's daughter Jenny, age 25, and her granddaughter Molly, age 3, moved in and lived with her the entire year. Jenny's only income for 2020 was $13,000 in unemployment compensation. Jenny provided over half of her own support. Molly did not provide more than half of her own support.
- Barbara's sister Claire is age 47. She lived with Barbara for the last 7 months of 2020. Her only income for 2020 was $26,350 in W-2 wages. She used this income to provide over half of her own support.
- All individuals in the household are U.S. citizens with valid Social Security numbers. No one has a disability.
1. Which individuals can make an agreement on who can claim Molly as a dependent?
A. Barbara and Jenny
B. Barbara and Claire
C. Jenny and Claire
D. Barbara, Jenny, and Claire
2.Who can claim the earned income credit for Molly?
A. Claire, because she has the lower AGI
B. Jenny, because she is Molly's mother
C. Barbara, if Jenny allows her to claim Molly as a dependent
D. None of the above.
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D. Barbara, Jenny, and Claire
A. Claire because she has the lower AGI
Step-by-step explanation
For one to offer suggestion on whom to claim a qualifying child as dependent, they should be related to the child, they should live with the child for more than half a year. Moreover, you should be in position to offer financial support to the child. Since we were told that Molly does not provide half of her support and the three individuals have stay with her for more than half a year then they are all liable to offer suggestions on whom is fit to claim Molly as dependent.
For question two, we will eliminate to get the correct answer. First, we know that Jenny does not qualify because her only earning is from unemployment compensation. Moreover, we know that income tax credit is targeted towards low income earners and since the three of them are capable of claiming Molly as dependent therefore, the one with less wages is more suitable for the income tax credit. And since Claire as lower wage it is appropriate for her to claim the credit.
