1. Glenn, 54, and Sheila, 47, are married, have a daughter, and have a household income of $150,683. During 2020, they did not have health coverage and they were not eligible for an exemption from coverage for any month of the year. $49,763 is the state filing threshold for a married couple, both under 65 years old with one dependent for tax year 2020. When Glenn and Sheila file their California tax return, they will have to pay an Individual Shared Responsibility Penalty for what amount?

A. $0

B. $1,875

C. $2,523

D. $3,000

2. Which of the following statements is not true regarding estimated tax payments?

A. If the taxpayer is a military service member not domiciled in California, he or she does not include his or her military pay in his or her computation of estimated tax payments

B. Taxpayers with 2020 California adjusted gross income equal to or greater than $1,000,000 (or $500,000 if married/RDP filing separately), must figure estimated tax based on their tax for 2020

C. A taxpayer must make estimated tax payments even if he or she is a nonresident or new resident of

California in 2020 and did not have a California tax liability in 2019

D. To avoid an estimated tax penalty, taxpayers are required to pay 30% of the required annual payment for the 1st required installment

3. Erin receives and accepts a permanent job offer in Spain. She and her spouse sell their home in California, pack all of their possessions and move to Spain on May 5, 2020. Their children also relocate to Spain on the same date. They lease an apartment and enroll the children in school in Spain. They both obtain a driver’s license from Spain and make numerous social connections in their new home. They have no intention of returning to California.

Which of the following statements is true?

A. Both Erin and her spouse are considered part-year residents of California

B. The entire family are considered full-year California residents

C. Erin is considered a part-year resident, but her spouse is considered a full-year resident

D. Erin is considered a full-year resident, but her spouse is considered a part-year resident

4. Jason Golden is a business executive and resides in Washington with his family. Several times each year, he travels to other states for business purposes. His average stay is one or two weeks, and the entire time spent in California for any taxable year does not exceed six weeks. Jason’s family usually remains in Washington while he is traveling for business purposes. Which of the following statements applies to Jason?

A. Jason is not a California resident because his stays in California are temporary or transitory in nature

B. Jason is a California resident because he does business in California

C. Jason is a resident but is not taxed on his income from California sources

D. Jason is a California resident based on safe harbor rules

5. Steve is a California resident who lives and works as a computer consultant in Walnut Creek, CA. He earned $75,000 while working for XYZ LTD in 2020. Steve additionally had a contract job from ABC Co. based in Arizona. His contract earnings totaled $17,000 in 2020. What amount is Steve’s total California resident income in 2020?

A. $75,000

B. $83,500

C. $90,000

D. $92,000

6. Karla bought a virtual assistant device online for $200, including shipping, and had it sent to her home. However, she was not charged tax during the purchase. Karla reviews the California City & County Sales & Use Tax Rates and determines her local rate is 8.0%. What amount of Use Tax does Karla owe on her California state income tax return for this purchase?

A. $0

B. $4

C. $8

D. $16

7. All of the following are true regarding the 2020 California Earned Income Tax Credit (CalEITC) except:

A. The Cal EITC is refundable

B. The taxpayer, his or her spouse, and any qualifying children must have a Social Security number or an

Individual Taxpayer Identification Number (ITIN) to be eligible

C. The taxpayer’s investment income, such as interest, dividends, royalties, and capital gains cannot exceed

certain limits for the entire tax year to qualify for the CalEITC

D. Self-employment income cannot be used to qualify for the CalEITC

8. Rosalinda Guzman applies for a College Access Tax Credit (CATC) reservation on October 31, 2020. Her proposed contribution is $10,000. The California Educational Facilities Authority (CEFA) grants a $5,000 credit reservation on November 7. Rosalinda makes a $10,000 contribution to the fund on November 22, 2020. CEFA sends the credit certification to Rosalinda on December 1. Rosalinda may claim a College Access Tax Credit for what amount on her California tax return?

A. $0

B. $4,000

C. $5,000

D. $10,000

Lesson 3

9. Ernie Brooks lived and worked exclusively in California until he retired on December 31, 2020. He moved to Nevada on January 1, 2021. His former California employer pays its employees on the 5th of every month. On January 10, 2021, Ernie received in the mail his last paycheck of $4,000 from his former California employer. What amount of the compensation is taxable by California?

A. $0

B. $2,000

C. $3,000

D. $4,000

10. A divorce decree showed Ron Fowler was to provide $2,000 a month of "family support" to his ex-spouse. No amount of family support is designated as child support. What amount of the payment is considered alimony?

A. $0

B. $1,000

C. $1,500

D. $2,000