HRB COMPREHENSIVE REVIEW 2026
VERIFIED QUESTIONS AND SOLUTIONS
◉CHAPTER 11: EITC AND ACTC Answer:
◉Who may qualify for the Additional Child Tax Credit? Answer:
Must qualify for the Child Tax Credit and has one of the following:
Earned Income exceeding $3000, 3 or more qualifying children
whose child tax credit was limited
◉What is the second due diligence requirements for the EITC,
CTC/ACTC and AOTC and how does a paid preparer meet this
requirement for EITC and CTC/ACTC? Answer: Requirement 2 - The
second due diligence requirements for ACTC is to complete and keep
all worksheets for ACTC the credit is calculated using Schedule 8812
for CTC a worksheet must be completed and kept
◉If a taxpayer has no qualifying children, what are the four
qualifications they must meet to receive the Earned Income Tax
Credit? Answer: 1. Must be at least 25 years old but younger than 65
on Dec 31, 2016 (If married filing jointly either spouse can meet this
requirement) 2. Must not be able to be claimed as a dependent on
another taxpayers return 3. Must not be a qualifying child of another
person 4. Must live in the United States more than 1/2 the year 5.
,Must have earned income and AGI of less than $14,880 ($20,430 if
MFJ)
◉If a taxpayer has one or more qualifying children, what the four
specific qualifcations they must meet to receive the Earned Income
Tax Credit? Answer: (11.12) 1. Have qualifying child who meets the
relationship, age, residency and joint return tests 2. Have a
qualifying child who is not claimed by another EITC 3. Not be
qualifying child of another person 4. Have earned income and AGI
less than one of the following: *$39,296 ($44,846 if MFJ) *$44,648
($50,198 if MFJ) with two qualifying children *$47,955 ($53,606 if
MFJ) with three or more children
◉What are the six qualifications that must be met for any taxpayers
to be eligible to claim the Earned Income Tax Credit? Answer: 1.
Have a valid SSN 2. Not use the filing status MFS 3. Be a US citizen or
resident alien all year 4. Not file a Form 2555, Foreign Earned
Income or Form 2555EZ Foreign Income Exclusion 5. Have
investment income of $3400 or less 6. Have Earned Income of at
least $1
◉Chris (26) has an earned income and AGI of $9,486. He has no
other income. He lived in the United States all year and is not one's
dependent. He has a valid SSN and is filing as single. He is a US
citizen. Does Chris qualify for EITC? Answer: Yes
,◉What is the third due diligence requirement for the EITC,
CTC/ACTC, and AOTC, and how does a paid preparer meet this
requirement for EITC and CTC/ACTC? Answer: Knowledge
Requirement: Tax preparer cannot know of or have any reason to
know that any information used to determine taxpayers eligibility
for, or the amount of , the credit is incorrect or inconsistent. Tax
Preparers must complete the smell test (Retain notes and ask open
end questions)
◉Is unemployment compensation taxable? Answer: Yes
◉Are scholarships and fellowships taxable? Answer: If the student
is a non degree candidate or is not attending an eligible educational
institution then the scholarship or fellowship are fully taxable
◉What documents will the taxpayer receive from their employer
reproting disability pension payments? Answer: 1099R
◉Where is income from disability pension payments entered on
Form 1040 A? Answer: 1040 A line 7 Note: once the taxpayer
reaches minimum retirement age, pension income is reported on
Form 1040A lines 12a and 12b..it could go on line 12a or b if retired
◉Under what circumstances can a d disability pension qualify as
earned income for the EITC Answer: Before the taxpayer reaches
, minimum retirement age, income is treated as wage income and is
considered earned income for EITC purposes
◉What types of income must be reported on Form 1040 and cannot
be reported on Form 1040a? Answer: Gambling winnings, Alimony,
Prizes and Awards, jury duty, hobby income (compare 1040 and
1040A if you need help figuring it out
◉CHAPTER 14: ADJUSTMENTS Answer:
◉What are the four adjustments that can be claimed on Form 1040A
Answer: Educator Expenses, IRA Deduction, Student Loan Interest
Deduction, Tuition and Fees Deduction
◉How much may an eligible educator deduct for qualified classroom
expenses as an adjustment to income? Answer: $250 per educator
◉Who is an eligible educator? Answer: Someone who worked 900
hours during the school year as a teacher, instructor, teachers aide,
counselor principal or administrator in an elementary or secondary
school (Kindergarten to 12th)
◉Where is the educator expense reported? Answer: 1040 pg 1 Line
23, 1040A Line 16
VERIFIED QUESTIONS AND SOLUTIONS
◉CHAPTER 11: EITC AND ACTC Answer:
◉Who may qualify for the Additional Child Tax Credit? Answer:
Must qualify for the Child Tax Credit and has one of the following:
Earned Income exceeding $3000, 3 or more qualifying children
whose child tax credit was limited
◉What is the second due diligence requirements for the EITC,
CTC/ACTC and AOTC and how does a paid preparer meet this
requirement for EITC and CTC/ACTC? Answer: Requirement 2 - The
second due diligence requirements for ACTC is to complete and keep
all worksheets for ACTC the credit is calculated using Schedule 8812
for CTC a worksheet must be completed and kept
◉If a taxpayer has no qualifying children, what are the four
qualifications they must meet to receive the Earned Income Tax
Credit? Answer: 1. Must be at least 25 years old but younger than 65
on Dec 31, 2016 (If married filing jointly either spouse can meet this
requirement) 2. Must not be able to be claimed as a dependent on
another taxpayers return 3. Must not be a qualifying child of another
person 4. Must live in the United States more than 1/2 the year 5.
,Must have earned income and AGI of less than $14,880 ($20,430 if
MFJ)
◉If a taxpayer has one or more qualifying children, what the four
specific qualifcations they must meet to receive the Earned Income
Tax Credit? Answer: (11.12) 1. Have qualifying child who meets the
relationship, age, residency and joint return tests 2. Have a
qualifying child who is not claimed by another EITC 3. Not be
qualifying child of another person 4. Have earned income and AGI
less than one of the following: *$39,296 ($44,846 if MFJ) *$44,648
($50,198 if MFJ) with two qualifying children *$47,955 ($53,606 if
MFJ) with three or more children
◉What are the six qualifications that must be met for any taxpayers
to be eligible to claim the Earned Income Tax Credit? Answer: 1.
Have a valid SSN 2. Not use the filing status MFS 3. Be a US citizen or
resident alien all year 4. Not file a Form 2555, Foreign Earned
Income or Form 2555EZ Foreign Income Exclusion 5. Have
investment income of $3400 or less 6. Have Earned Income of at
least $1
◉Chris (26) has an earned income and AGI of $9,486. He has no
other income. He lived in the United States all year and is not one's
dependent. He has a valid SSN and is filing as single. He is a US
citizen. Does Chris qualify for EITC? Answer: Yes
,◉What is the third due diligence requirement for the EITC,
CTC/ACTC, and AOTC, and how does a paid preparer meet this
requirement for EITC and CTC/ACTC? Answer: Knowledge
Requirement: Tax preparer cannot know of or have any reason to
know that any information used to determine taxpayers eligibility
for, or the amount of , the credit is incorrect or inconsistent. Tax
Preparers must complete the smell test (Retain notes and ask open
end questions)
◉Is unemployment compensation taxable? Answer: Yes
◉Are scholarships and fellowships taxable? Answer: If the student
is a non degree candidate or is not attending an eligible educational
institution then the scholarship or fellowship are fully taxable
◉What documents will the taxpayer receive from their employer
reproting disability pension payments? Answer: 1099R
◉Where is income from disability pension payments entered on
Form 1040 A? Answer: 1040 A line 7 Note: once the taxpayer
reaches minimum retirement age, pension income is reported on
Form 1040A lines 12a and 12b..it could go on line 12a or b if retired
◉Under what circumstances can a d disability pension qualify as
earned income for the EITC Answer: Before the taxpayer reaches
, minimum retirement age, income is treated as wage income and is
considered earned income for EITC purposes
◉What types of income must be reported on Form 1040 and cannot
be reported on Form 1040a? Answer: Gambling winnings, Alimony,
Prizes and Awards, jury duty, hobby income (compare 1040 and
1040A if you need help figuring it out
◉CHAPTER 14: ADJUSTMENTS Answer:
◉What are the four adjustments that can be claimed on Form 1040A
Answer: Educator Expenses, IRA Deduction, Student Loan Interest
Deduction, Tuition and Fees Deduction
◉How much may an eligible educator deduct for qualified classroom
expenses as an adjustment to income? Answer: $250 per educator
◉Who is an eligible educator? Answer: Someone who worked 900
hours during the school year as a teacher, instructor, teachers aide,
counselor principal or administrator in an elementary or secondary
school (Kindergarten to 12th)
◉Where is the educator expense reported? Answer: 1040 pg 1 Line
23, 1040A Line 16
