Volunteer Income Tax Assistance (VITA) Certification Practice Test

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Which credit is not claimable by Evan?

American Opportunity Credit
Lifetime Learning Credit
Retirement Savings Contributions Credit
None of the above

The correct answer is: Retirement Savings Contributions Credit

The Retirement Savings Contributions Credit, often referred to as the Saver's Credit, is specifically designed for individuals who contribute to a retirement savings plan, such as a 401(k) or an Individual Retirement Account (IRA). This credit is aimed at low- to moderate-income taxpayers to incentivize retirement savings. In order to claim this credit, the individual must meet certain income limits and contribute to a qualified retirement plan in the tax year. If Evan does not meet the income threshold or has not made the necessary retirement contributions, he would be ineligible to claim this credit. On the other hand, the American Opportunity Credit and the Lifetime Learning Credit are education-related credits available to eligible students or their parents who are paying for higher education expenses. Since these credits are tied to educational expenses rather than retirement savings, they remain claimable by Evan if he meets the necessary criteria for education. The option "None of the above" implies that all credits listed could be claimable, which is not the case given that the Retirement Savings Contributions Credit is not eligible for claim under the right circumstances. Thus, it is clear why this credit is indicated as the one not claimable by Evan.