HR BLOCK CERTIFICATION EXAM PAPER
2026 COMPLETE QUESTIONS AND
CORRECT ANSWERS GRADED A+
◉ If an employee thinks their Form W-2 is incorrect, what should
they do? Answer: If the taxpayer's name, social security number,
earnings, or withholdings are incorrect, the taxpayer should notify
their employer and request a corrected Form W-2. The employee
should request that the employer update their records and verify
that the earnings were properly credited with the Social Security
Administration. However, the taxpayer is still responsible for filing a
timely tax return. If the employee's attempts to obtain a corrected
Form W-2 from their employer are not successful, the taxpayer
should notify the IRS. It may be necessary to prepare a substitute
Form W-2.
◉ Is interest received on U.S. Treasury obligations taxable on state
and/or local returns? Answer: No. Interest on U.S. Treasury
obligations is exempt from state and local tax by federal law.
◉ Is municipal bond interest taxable on a federal return Answer:
No, the federal government does not tax municipal bond interest.
,◉ How is interest income reported to the taxpayer? Answer:
Interest income is reported to the taxpayer on Form 1099-INT or a
substitute statement.
◉ What information do you need to know to determine whether a
nondependent taxpayer is required to file a return? Answer: The
taxpayer's filing status, age at the end of the tax year, and gross
income for the year.
◉ For tax purposes, when is a person's marital status determined?
Answer: On the last day of the tax year, or the date of death.
◉ How much is added to the standard deduction if the taxpayer (or
spouse) is age 65 or older, or blind? Answer: $1,350 for married
taxpayers and qualifying widow(er)s, or $1,700 for those filing
single or head of household.
◉ What is the personal exemption amount for 2021 Answer: There
is no personal exemption for 2021. A personal exemption was an
amount previously allowed by law to reduce income that would
otherwise be taxed. The Tax Cuts and Jobs Act of 2017 repealed this
deduction beginning in 2018.
◉ How is the gross income filing requirement determined for most
nondependent taxpayers Answer: The taxpayer's standard
deduction, including the additional amounts for age. However, for
,married filing separately, or married filing jointly when the spouses
did not live together at the end of the year, the amount is $5.
◉ What is the difference between injured spouse allocation and
innocent spouse relief? Answer: The IRS provides an injured spouse
allocation for the taxpayer to protect their portion of a refund from a
spouse's past-due federal income tax, unpaid student loans, unpaid
child and spousal support, or state income tax.
The IRS provides innocent spouse relief to taxpayers who file a joint
return and later learn that their spouse has underestimated income
(or overstated a credit or deduction) on the return.
◉ Is unemployment compensation taxable? Answer: Yes,
unemployment compensation is fully taxable.
◉ Are scholarships and fellowships taxable? Answer: Sometimes.
Generally, scholarships and fellowships are excluded from income by
degree-seeking candidates to the extent that they are used to pay
qualified education expenses, such as tuition and course-related
fees. However, if they are used to pay for room and board or other
expenses, they are taxable.
◉ What document will the taxpayer receive from their employer
reporting disability pension payments? Answer: The income is
reported on Form 1099-R
, ◉ Under what circumstances can a disability pension qualify as
earned income for the EIC? Answer: Disability pension income
received before the taxpayer attains minimum retirement age for
their company is reported as wage income. It is also considered
earned income for purposes of EIC.
◉ What types of income must be reported on Schedule 1 (Form
1040) and then reported on Form 1040? Answer: Gambling
winnings, alimony, jury duty pay, canceled debts, and hobby income
are some examples of income that must be reported on Schedule 1
(Form 1040) and then reported on Form 1040.
◉ What are the adjustments that can be claimed on Schedule 1
(Form 1040)? Answer: Some examples of adjustments that can be
claimed on Schedule 1 are:
Educator expense deduction.
The health savings account (HSA) deduction.
Moving expenses for members of the military.
Self-employment tax deduction.
Self-employed health insurance deduction.
Penalty on early withdrawal of savings.
Alimony payments.
2026 COMPLETE QUESTIONS AND
CORRECT ANSWERS GRADED A+
◉ If an employee thinks their Form W-2 is incorrect, what should
they do? Answer: If the taxpayer's name, social security number,
earnings, or withholdings are incorrect, the taxpayer should notify
their employer and request a corrected Form W-2. The employee
should request that the employer update their records and verify
that the earnings were properly credited with the Social Security
Administration. However, the taxpayer is still responsible for filing a
timely tax return. If the employee's attempts to obtain a corrected
Form W-2 from their employer are not successful, the taxpayer
should notify the IRS. It may be necessary to prepare a substitute
Form W-2.
◉ Is interest received on U.S. Treasury obligations taxable on state
and/or local returns? Answer: No. Interest on U.S. Treasury
obligations is exempt from state and local tax by federal law.
◉ Is municipal bond interest taxable on a federal return Answer:
No, the federal government does not tax municipal bond interest.
,◉ How is interest income reported to the taxpayer? Answer:
Interest income is reported to the taxpayer on Form 1099-INT or a
substitute statement.
◉ What information do you need to know to determine whether a
nondependent taxpayer is required to file a return? Answer: The
taxpayer's filing status, age at the end of the tax year, and gross
income for the year.
◉ For tax purposes, when is a person's marital status determined?
Answer: On the last day of the tax year, or the date of death.
◉ How much is added to the standard deduction if the taxpayer (or
spouse) is age 65 or older, or blind? Answer: $1,350 for married
taxpayers and qualifying widow(er)s, or $1,700 for those filing
single or head of household.
◉ What is the personal exemption amount for 2021 Answer: There
is no personal exemption for 2021. A personal exemption was an
amount previously allowed by law to reduce income that would
otherwise be taxed. The Tax Cuts and Jobs Act of 2017 repealed this
deduction beginning in 2018.
◉ How is the gross income filing requirement determined for most
nondependent taxpayers Answer: The taxpayer's standard
deduction, including the additional amounts for age. However, for
,married filing separately, or married filing jointly when the spouses
did not live together at the end of the year, the amount is $5.
◉ What is the difference between injured spouse allocation and
innocent spouse relief? Answer: The IRS provides an injured spouse
allocation for the taxpayer to protect their portion of a refund from a
spouse's past-due federal income tax, unpaid student loans, unpaid
child and spousal support, or state income tax.
The IRS provides innocent spouse relief to taxpayers who file a joint
return and later learn that their spouse has underestimated income
(or overstated a credit or deduction) on the return.
◉ Is unemployment compensation taxable? Answer: Yes,
unemployment compensation is fully taxable.
◉ Are scholarships and fellowships taxable? Answer: Sometimes.
Generally, scholarships and fellowships are excluded from income by
degree-seeking candidates to the extent that they are used to pay
qualified education expenses, such as tuition and course-related
fees. However, if they are used to pay for room and board or other
expenses, they are taxable.
◉ What document will the taxpayer receive from their employer
reporting disability pension payments? Answer: The income is
reported on Form 1099-R
, ◉ Under what circumstances can a disability pension qualify as
earned income for the EIC? Answer: Disability pension income
received before the taxpayer attains minimum retirement age for
their company is reported as wage income. It is also considered
earned income for purposes of EIC.
◉ What types of income must be reported on Schedule 1 (Form
1040) and then reported on Form 1040? Answer: Gambling
winnings, alimony, jury duty pay, canceled debts, and hobby income
are some examples of income that must be reported on Schedule 1
(Form 1040) and then reported on Form 1040.
◉ What are the adjustments that can be claimed on Schedule 1
(Form 1040)? Answer: Some examples of adjustments that can be
claimed on Schedule 1 are:
Educator expense deduction.
The health savings account (HSA) deduction.
Moving expenses for members of the military.
Self-employment tax deduction.
Self-employed health insurance deduction.
Penalty on early withdrawal of savings.
Alimony payments.
