HR BLOCK FINAL TEST (ITC 2025) 2 VERSIONS ACTUAL
EXAM 200 QUESTIONS AND CORRECT DETAILED ANSWERS
WITH RATIONLES (VERIFIED ANSWERS) | ASSURED
SUCCESS
A combined due diligence penalty of $2,180 would indicate a penalty for which of the
following?
EIC, CTC/ODC/ACTC, and head of household.
EIC, AOTC, and CTC/ODC/ACTC.
EIC, AOTC, CTC/ODC/ACTC, and head of household.
EIC, PTC, CTC/ODC/ACTC, and head of household. correct answers EIC, AOTC,
CTC/ODC/ACTC, and head of household.
When dependent care benefits are withheld from a taxpayer's income, where are they reported by
the employer?
Form 2441.
Form 1040.
Box 10 of Form W-2.
The employer is not required to report them. correct answers Box 10 of Form W-2.
All of the following are due diligence requirements a tax preparer must meet for EIC, AOTC,
CTC/ODC/ACTC, and HOH, EXCEPT:
Investigate and verify the accuracy of information the taxpayer provides to show eligibility for
EIC, AOTC, CTC/ODC/ACTC, and HOH.
,Complete all worksheets used to compute the credits. If the worksheet is completed by hand,
keep a copy in the taxpayer's client file.
Maintain a copy of documents provided by the taxpayer that the tax preparer relied on when
determining credit eligibility. Then record the date the information was obtained and the name of
who provided the information.
When information provided by the taxpayer appears to be incorrect, inconsistent, or incomplete,
the tax preparer must make additional inquiries to determine if the taxpayer is eligible for the
benefit. Then document both the questions asked and responses provided. correct answers
Investigate and verify the accuracy of information the taxpayer provides to show eligibility for
EIC, AOTC, CTC/ODC/ACTC, and HOH.
When a taxpayer receives Form 1099-R with no amount entered in box 2a and code 7 entered in
box 7, the entire distribution:
Could be partly or entirely taxable.
Is never taxable.
Is an early distribution and taxable.
Has been rolled into a traditional IRA or into another qualified plan. correct answers Is never
taxable.
What is the maximum amount of the American Opportunity Tax Credit a taxpayer could receive
per student?
$1,650
$1,800
$2,000
$2,500 correct answers $2,500
Which test for a qualifying child does NOT need to be met in order for the child to be a
qualifying person for purposes of Earned Income Credit (EIC)?
, Age.
Relationship.
Residency.
Support. correct answers Support.
Which of the following expenses qualifies for an education credit in 2021?
Tuition payments. The taxpayer didn't receive scholarships, grants, or other nontaxable benefits.
Fees for an optional student activity.
Cost of student medical fees.
Tuition payments. The taxpayer received a nontaxable grant, which covered the entire tuition
expense. correct answers
Employer-provided dependent care assistance:
May be used for the Child and Dependent Care Credit.
Is subtracted from the total expenses for child or dependent care on Form 2441.
Is included in wages on Form W-2.
Is not reported to the IRS. correct answers
Which of the following is NOT a percentage of social security benefits subject to federal tax? Up
to __________.
0%
50%
85%
100% correct answers 100%
What is the maximum amount of the lifetime learning credit?
$1,100 per return.
$1,650 per return.
EXAM 200 QUESTIONS AND CORRECT DETAILED ANSWERS
WITH RATIONLES (VERIFIED ANSWERS) | ASSURED
SUCCESS
A combined due diligence penalty of $2,180 would indicate a penalty for which of the
following?
EIC, CTC/ODC/ACTC, and head of household.
EIC, AOTC, and CTC/ODC/ACTC.
EIC, AOTC, CTC/ODC/ACTC, and head of household.
EIC, PTC, CTC/ODC/ACTC, and head of household. correct answers EIC, AOTC,
CTC/ODC/ACTC, and head of household.
When dependent care benefits are withheld from a taxpayer's income, where are they reported by
the employer?
Form 2441.
Form 1040.
Box 10 of Form W-2.
The employer is not required to report them. correct answers Box 10 of Form W-2.
All of the following are due diligence requirements a tax preparer must meet for EIC, AOTC,
CTC/ODC/ACTC, and HOH, EXCEPT:
Investigate and verify the accuracy of information the taxpayer provides to show eligibility for
EIC, AOTC, CTC/ODC/ACTC, and HOH.
,Complete all worksheets used to compute the credits. If the worksheet is completed by hand,
keep a copy in the taxpayer's client file.
Maintain a copy of documents provided by the taxpayer that the tax preparer relied on when
determining credit eligibility. Then record the date the information was obtained and the name of
who provided the information.
When information provided by the taxpayer appears to be incorrect, inconsistent, or incomplete,
the tax preparer must make additional inquiries to determine if the taxpayer is eligible for the
benefit. Then document both the questions asked and responses provided. correct answers
Investigate and verify the accuracy of information the taxpayer provides to show eligibility for
EIC, AOTC, CTC/ODC/ACTC, and HOH.
When a taxpayer receives Form 1099-R with no amount entered in box 2a and code 7 entered in
box 7, the entire distribution:
Could be partly or entirely taxable.
Is never taxable.
Is an early distribution and taxable.
Has been rolled into a traditional IRA or into another qualified plan. correct answers Is never
taxable.
What is the maximum amount of the American Opportunity Tax Credit a taxpayer could receive
per student?
$1,650
$1,800
$2,000
$2,500 correct answers $2,500
Which test for a qualifying child does NOT need to be met in order for the child to be a
qualifying person for purposes of Earned Income Credit (EIC)?
, Age.
Relationship.
Residency.
Support. correct answers Support.
Which of the following expenses qualifies for an education credit in 2021?
Tuition payments. The taxpayer didn't receive scholarships, grants, or other nontaxable benefits.
Fees for an optional student activity.
Cost of student medical fees.
Tuition payments. The taxpayer received a nontaxable grant, which covered the entire tuition
expense. correct answers
Employer-provided dependent care assistance:
May be used for the Child and Dependent Care Credit.
Is subtracted from the total expenses for child or dependent care on Form 2441.
Is included in wages on Form W-2.
Is not reported to the IRS. correct answers
Which of the following is NOT a percentage of social security benefits subject to federal tax? Up
to __________.
0%
50%
85%
100% correct answers 100%
What is the maximum amount of the lifetime learning credit?
$1,100 per return.
$1,650 per return.
