Choice "b" is correct. The child and dependent care credit is nonrefundable.
The only refundable credits are the child tax credit (which is a different
credit with a similar name), the earned income credit, withholding taxes,
portions of the Hope Scholarship credit, and excess Social Security taxes paid.
The child and dependent care credit is a "personal" tax credit.
Choice "a" is incorrect. The child must be under age 13, not age 18, to be a
qualifying child and for there to be a credit.
Choice "c" is incorrect. The child need not be a direct descendant of the
taxpayer for there to be a credit. To be a qualifying child, the child must
merely be a dependent of the taxpayer.
Choice "d" is incorrect. The maximum child and dependent care credit is 35%
of eligible expenses, with a phase out for AGI over $15,000. There is no pure
$600 limit.
