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    PracticeCPA®CPA REG Practice Exam 5Question 56
    Hard1 markMultiple Choice
    Area IV: Individual TaxationREGTaxationIndividual

    CPA · Question 56 · Area IV: Individual Taxation

    Which of the following credits can result in a refund even if the taxpayer has no income tax liability?

    Answer options:

    A.

    Adoption Credit

    B.

    Earned Income Tax Credit (EITC)

    C.

    Credit for the Elderly or the Disabled

    D.

    General Business Credit

    How to approach this question

    EITC is the classic refundable credit.

    Full Answer

    B.Earned Income Tax Credit (EITC)✓ Correct
    B
    The Earned Income Tax Credit (EITC) is a refundable credit, meaning it can generate a refund in excess of tax liability.

    Common mistakes

    Thinking the Adoption credit is refundable.
    Question 55All questionsQuestion 57

    Practice the full CPA REG Practice Exam 5

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