Volunteer Income Tax Assistance (VITA) Certification Practice Test

How much did Melinda pay for tuition, qualifying her for the education credit?

1. $300

2. $500

3. $900

4. $1,200

The correct answer is: $900

To determine Melinda's tuition payment that qualifies her for the education credit, it's important to recognize the criteria that establish eligibility for such credits. The education credits, specifically the American Opportunity Credit and the Lifetime Learning Credit, allow taxpayers to claim a portion of qualified education expenses, which include tuition and mandatory fees. In this case, the correct amount is $900, as this figure typically falls within the range of eligible expenses that meet the criteria for claiming these credits. For example, the American Opportunity Credit allows a maximum of $2,500 for qualified education expenses per eligible student, and the Lifetime Learning Credit permits up to $2,000. Choosing an amount like $300 or $500 may not significantly represent educational expenses that typically lead to qualifying for these credits, especially if there are additional costs associated with education that are often incurred. An amount of $1,200 exceeds what is commonly necessary for a single semester's or year's tuition for many qualifying educational programs, depending on the institution. Thus, Melinda’s payment of $900 is a plausible amount that aligns well with general tuition costs, thereby qualifying her for an education credit based on the standard eligibility guidelines.