2023 Puerto Rico VITA Certification Test Level I:
The first five questions are designed to measure key competencies, including how to figure the allowable portion of standard deductions to U.S. income. They also encourage use of your research tools.Use Publication 4696 PR - VITA/TCE Puerto Rico Resource Guide and Publication 1321 Special Instructions For Bona Fide Residents Of Puerto Rico Who Must File A U.S. Individual Income Tax Return Form 1040 or Form 1040-SR to answer the questions.
1.1 Lauren was a resident of Puerto Rico during 2023. She is single and under 65 years of age. She works as a U.S. government employee and her salary was $34,000. She also received income of $6,000 from a part-time job in Puerto Rico not subject to U.S. tax. Use the worksheet on page 3 in Publication 1321 to calculate the allowable portion of the standard deduction.
What is the allowable portion of the standard deduction that Lauren can claim?
a. $11,773 ANSWER
b. $13,850
c. $15,700
d. $25,900
1.2 German and Elena were residents of Puerto Rico in 2023. They are both over 65 years old and file a joint return. German is retired from the U.S. Postal Service and Elena is retired from the U.S. Veterans Affairs. Their taxable pensions were $29,000 and $42,000, respectively.
What is German and Elena’s standard deduction?
a. $25,900
b. $27,700
c. $29,200
d. $30,700 ANSWER
1.3 Marco is 40 years old, qualifies to file Head of Household, and a resident of Puerto Rico during 2023. He informed you that he received the following sources of income: $12,500 for a job he performed in the state of Florida; $23,200 received from the federal government for services performed in Puerto Rico. He also received $6,300 from a part-time job in Puerto Rico that is exempt from federal income tax. Use the worksheet on page 3 in Publication 1321 to calculate the allowable portion of the standard deduction.
What is the allowable portion of Marco’s standard deduction?
a. $13,850
b. $15,700
c. $17,680 ANSWER
d. $20,800
1.4 Camilo is a bona fide resident of Puerto Rico, who received Social Security benefits and pension income from the University of Puerto Rico.
Does Camilo have U.S. source income?
a. Yes, he has U.S. source income. ANSWER
b. No, he does not have U.S. source income.
1.5 Paloma is single and received unemployment benefits from the Puerto Rico Department of Labor reported on a Form 1099-G.
What is the factor determining source of income for unemployment?
a. Residence of the payee
b. The location of the payer
c. Unemployment compensation is generally considered sourced where the taxpayer performed the underlying services ANSWER
d. None of the above
Level I PR Test Scenario 1 Sol Fuente – Taxpayer Documents:
• Completed Intake/Interview and Quality Review Sheet• Form 499R-2/W-2PR, Puerto Rico Withholding Statement
Level I PR Test Scenario 1 Sol Fuente – Interview Notes:
• Sol Fuente is employed as an executive secretary.• Sol is divorced with two children. Delmar is 7 years old and Lucas is 16 years old.
• Sol paid all the cost of keeping up the home and more than half the support for her children.
• Social Security numbers: Sol Fuente 133-00-XXXX, Delmar Gracia, daughter, 599-00-XXXX and Lucas Gracia, son, 598-00-XXXX.
• If she is entitled to a refund, Sol would like to receive it via direct deposit.
• Sol has a checking account from Any Town Credit Union Account Number: 54321 Routing Number: 123456789.
• Sol has an Identity Protection Personal Identification Number (IP PIN): 987654.
Level I PR Test Scenario 1 Sol Fuente – Test Questions:
Based on the information provided by Sol Fuente, complete Form 1040-SS or Form 1040-SS (SP) and the required forms and schedules to answer the following questions. You are a volunteer at site S21014444.1.6 What is the amount of the Additional Child Tax credit on line 19, Part II, in Form 1040-SS (SP)?
a. $0
b. $3,000
c. $3,200 ANSWER
d. $6,000
1.7 What filing status can Sol use?
a. Head of Household ANSWER
b. Married Filing Jointly
c. Married Filing Separately
d. Qualifying surviving spouse
1.8 Sol can file Form 1040-SS (SP) or Form 1040-SS to claim the Additional Child Tax credit.
a. True ANSWER
b. False
1.9 The IRS issues an Identity Protection Personal Identification Number (IP PIN) to protect and confirm taxpayer identity when submitting a tax return.
Should the IP PIN be included on the Form 1040SS or Form 1040-SS (SP)?
a. Yes ANSWER
b. No
1.10 Sol can claim up to $1,600 per child or the Social Security and Medicare taxes withheld from his wages, whichever is lower.
a. True ANSWER
b. False
Level I PR Test Scenario 2 Hernan Cortez and Luisa Oviedo – Taxpayer Documents
• Completed Intake/Interview and Quality Review Sheet• Form 499R-2/W-2PR, Puerto Rico Withholding Statement
Level I PR Test Scenario 2 Hernan Cortez and Luisa Oviedo – Interview Notes
• Hernan Cortez and Luisa Oviedo are married and bona fide residents of Puerto Rico.• Hernan and Luisa’s SSNs are 581-00-XXXX and 582-00-XXXX respectively.
• Luisa is a housewife who did not receive income during the year.
• Hernan is an accountant for the Puerto Rico Tourism Company; his wages for this year were $53,000.
• His contributions for the Social Security and Medicare were $3,286 and $768.50, respectively.
• They have two children under 17 and an older child Henry, who is permanently and totally disabled.
• Hernan and Luisa would like a direct deposit to their checking account 57892; routing number 02190XXXX.
Name Date of Birth Relationship
Edward Cortez 3-12-2016 Son
Maria Cortez 3-12-2016 Daughter
Henry Cortez 6-01-2004 Son
Level I PR Test Scenario 2 Hernan Cortez and Luisa Oviedo – Test Questions:
1.11 What filing status can Hernan Cortez and Luisa Oviedo claim on their return?a. Single
b. Married Filing Jointly ANSWER
c. Head of Household
d. None of the above
1.12 How many dependents are eligible for the Additional Child Tax Credit (ACTC)?
a. 0
b. 1
c. 2 ANSWER
d. 3
1.13 How much is the Additional Child Tax Credit that Hernan and Luisa are entitled to receive?
a. $0
b. $3,000
c. $3,200
d. $4,055 ANSWER
1.14 The modified adjusted gross income for Hernan and Luisa is within the income limit to claim the Additional Child Tax Credit.
a. True ANSWER
b. False
1.15 Which form should be completed by Hernan and Luisa to claim the Additional Child Tax Credit?
a. Form 1040NR and Schedule 8812
b. Form 1040 SS and Schedule 8812
c. Form 1040 SS (SP) or Form 1040-SS ANSWER
d. Any of the above.
2023 Level I Puerto Rica Test 100% Pass Proof:
a. 0
b. 1
c. 2
d. 3 ANSWER Incorrect (The correct answer is c. 2) and that makes it 100% Pass.
2023 Puerto Rico VITA Certification Test Level II:
The first five questions are designed to measure key competencies related to figuring the allowable portion of itemized deductions to U.S. income; calculating the source of pension income for service performed in the U.S.; and determining the taxable portion of Social Security benefits.
2.1 Adan and Eva are both under age 65 and bona fide residents of Puerto Rico who file a joint return. Adan had self-employed gross income of $30,000 from his business in Puerto Rico. Eva works for the federal government and her salary was $45,000. Before calculating the allowable portion, they had the following eligible itemized deductions:
● Home mortgage interest: $8,500
● Real estate taxes: $1,400
● Charitable contributions: $750
What is the amount of calculated allowable itemized deductions that can be claimed?
a. $0
b. $6,390 ANSWER
c. $27,700
d. $29,200
45000 Fred Gov. Income/7500 All Source Income=0.6
8500x0.6=5100
1400x0.6=840
750x0.6=450 (Total 6390)
2.2 Calculate the allowable standard deduction for Adan and Eva (see exercise 2.1 above). Based on these calculations, the allowable standard deduction is higher than the allowable itemized deductions.
a. True ANSWER
b. False
27700x0.6=16620
2.3 Franklin is a single taxpayer, 63 years old, and a bona fide resident of Puerto Rico with no dependents. Franklin received a Form SSA-1099, Social Security benefits, showing $26,700 in box 3. He did not receive any other income. Use Publication 4696(PR) Social Security Benefits section as your reference materials. Is any part of his Social Security benefits subject to U.S. income tax?
a. Yes
b. No ANSWER
2.4 In 2023, Alex, 85 years old, resident of Puerto Rico, received $26,000 from his U.S. Civil Service pension. The benefits of this pension are attributed to a 25-year career with the federal government, in the state of New York.
Alex can claim a Foreign Tax Credit on Form 1040 for the taxes paid to New York.
a. True
b. False ANSWER
When claiming a foreign tax credit, you must complete Form 1116, Foreign Tax Credit. See Topic no. 856 for more information about the foreign tax credit.
2.5 Santiago is single, 70 years old and received Form SSA-1099 for 2023, which shows benefits of $19,000 in box 5. He also received the following income during 2023:
● Taxable pension from the University of Puerto Rico of $37,000
● Salary of $5,000 from a company in Puerto Rico
● Taxable IRA distribution of $4,000 from a bank in Puerto Rico
Using Publication 915, Worksheet 1 and VITA/TCE Practice Lab https://vita. taxslayerpro.com/, what amount of his Social Security benefit is taxable to the United States?
a. $0
b. $16,150 ANSWER
c. $17,200
d. $19,000
19000+37000+4000=60000
19000+3700+4000+5000=65000
0.9231
Level II PR Test Scenario 1: Carolina Vigo – Taxpayer Documents:
● Completed Intake/Interview and Quality Review Sheet
Level II PR Test Scenario 1 Carolina Vigo – Interview Notes:
● Carolina Vigo is 70 and was born on January 2, 1953.● Carolina’s SSN is 123-00-XXXX and her grandson Lucas Cruz’s SSN is 124-00-XXXX.
● Her grandson, Lucas, was born on July 23, 2007, has lived with her for the last three years and qualifies her to file as Head of Household.
● Carolina pays the total cost of keeping up a home for herself and her grandson.
● She does not want to contribute to the presidential election campaign.
● If a refund or balance is due, Carolina would like a direct deposit to or direct debit from her checking account 67890; routing number 021904512.
● Her address and SSN are correct and were validated during the interview.
● Carolina is retired from the Civil Service Retirement System. She has a single life annuity and began receiving retirement benefits on January 5, 2010. The pension is attributed to services performed in New York. Carolina moved to Puerto Rico in 2010.
● Carolina receives Social Security benefits.
● According to the Simplified Method, Carolina can recover $2,667 of the cost of her pension tax free annually
Level II PR Test Scenario 1 Carolina Vigo –Test Questions:
Please complete Form 1040, Publication 915, Worksheet 1, and the child tax worksheet to answer the following questions. You are a volunteer at site S21014444.2.6 After considering the cost recovery of tax free amount; what is the taxable portion of Carolina’s pension?
a. $0
b. $15,000
c. $36,033 ANSWER
d. $38,700
2.7 Can Carolina claim a foreign tax credit for the taxes paid to Puerto Rico on her pension attributed to services she performed in New York?
a. Yes
b. No ANSWER
Foreign tax credit (IRS) – Question 2.7:
● If you must report income from Puerto Rican sources on your U.S. income tax return, then you can claim a foreign tax credit for income taxes paid to Puerto Rico on the same income.● To calculate your foreign tax credit, you must reduce the income taxes paid to Puerto Rico by the amount of income taxes allocable to excluded Puerto Rican source income.
● When claiming a foreign tax credit, you must complete Form 1116, Foreign Tax Credit.
● See Topic no. 856 for more information about the foreign tax credit.
● For more information about how to allocate deductions and credits with respect to excluded income as well as how to determine if you're a bona fide resident, refer to Topic no. 901, Publication 570, and Publication 1321.
2.8 What is the amount of Carolina’s standard deduction?
a. $4,000
b. $18,650
c. $22,650 ANSWER
d. $27,700
2.9 Carolina can claim the Child Tax Credit.
a. Yes ANSWER
b. No
2.10 The taxable amount of Carolina’s Social Security benefit (from the Publication\ 915 worksheet) is $12,871.
a. Yes ANSWER
b. No
Level II PR Test Scenario 2: Pedro Viera and Valeria Real – Taxpayer Documents:
● Completed Intake/Interview and Quality Review Sheet
Level II PR Test Scenario 2: Pedro Viera and Valeria Real – Interview Notes:
● Pedro Viera and Valeria Real are married, filing a joint return, and have two dependent children under the age of 17.● Valeria’s mother, Sofia Real, lives with them. She is permanently and totally disabled. Sofia received Social Security benefits that are not taxable and were not used for her support.
● The children qualify for claiming both the non refundable and refundable child tax credit.
● The Social Security number for Pedro is 134-00-XXXX (date of birth: 09/23/1982) and for Valeria is 135-00-XXXX (date of birth: 01/25/1980).
● They have a daughter, Crystal (date of birth: 05/13/2012; SSN: 136-00-XXXX), and a son, Louis (date of birth: 02/15/2014; SSN: 137-00-XXXX). Sofia Real’s SSN is 138-00- XXXX (date of birth: 03/30/1948).
● They do not itemize deductions.
● The Puerto Rico tax liability for 2023 is $ 6,200.
● Pedro and Valeria provided the entire cost of maintaining the household and all the support for their children and for Sofia.
● If a refund or balance is due, Pedro and Valeria would like a direct deposit to or direct debit from their checking account 53890; routing number 06790XXXX.
Level II PR Test Scenario 2: Pedro Viera and Valeria Real – Test Questions:
Complete the Form 1040, schedules, and worksheet based on the information provided by Pedro and Valeria, complete Form 1040, the required forms and schedules to answer the following questions. You are a volunteer at site S21014444.If you are using the Link & Learn Taxes Practice Lab, when entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice. In classroom situations, replace the Xs with the information provided by your instructor.
2.11 Pedro and Valeria’s total income shown on line 1a of Form 1040 is:
a. $0
b. $76,912
c. $86,912 ANSWER
d. $93,206
2.12 Pedro and Valeria are eligible to claim which of the following non-refundable credits on their 2023 tax return?
a. Other Dependent Credit
b. Foreign tax credit
c. Child Tax Credit
d. All of the above ANSWER
2.13 What is the amount of Foreign Taxes that should be entered on line 8 in Form 1116?
a. $0
b. $2,750
c. $4,500
d. $ 6,200 ANSWER
2.14 Which of the following items are included in the total payments on Pedro and Valeria’s tax return?
a. Federal income tax withheld from Form W-2
b. Additional child tax credit
c. Child Tax Credit
d. Both a and b ANSWER
2.15 What is the taxable income reported on Form 1040?
a. $0
b. $51,012
c. $59,212 ANSWER
d. $72,958
2023 Level II Puerto Rico Test Pass Proof:
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