HR BLOCK FINAL EXAM SCRIPT 2026
COMPREHENSIVE QUESTIONS AND
SOLUTIONS FULL CREDIT GUIDE
◉ Is the Child Tax Credit refundable or nonrefundable? Answer: For
most taxpayers, the Child Tax Credit is fully refundable in 2021. In
other years, the Child Tax Credit is nonrefundable. However, certain
taxpayers may qualify for the Additional Child Tax Credit, which is
refundable.
◉ How much is the penalty if a paid preparer fails to meet the Child
Tax Credit due diligence requirements? Answer: There is a $545
penalty for failing to meet the CTC/ODC/ACTC due diligence
requirement on one taxpayer's return.
◉ What is the first due diligence requirement for the CTC/ODC, and
how does a paid preparer meet this requirement? Answer:
Complete and submit Form 8867, Paid Preparer's Earned Income
Credit Checklist.
The form must be completed thoroughly and conscientiously by the
paid preparer. One Form 8867 must be submitted with every e-filed
or paper-filed return (original and/or amended) for every taxpayer
,who claims the EIC, CTC/ODC/ACTC, AOTC, and/or uses the head of
household filing status.
◉ What filing statuses are available to taxpayers who are unmarried
Answer: Qualifying widow(er), head of household, and single.
◉ How may a married taxpayer qualify as unmarried for tax
purposes? Answer: To qualify as unmarried for the purpose of
claiming the head of household filing status, a taxpayer must meet
all of the following:
Not file a joint return with their spouse.
Provide more than half the cost of maintaining their home.
The home must be the main home for the taxpayer and their
dependent child (or child who would be a dependent except that the
exemption was given to the noncustodial parent) for more than six
months of the tax year.
The taxpayer's spouse must not have lived in the home during the
last six months of the year.
◉ What requirements must be met for a single taxpayer to qualify to
file as head of household? Answer: The taxpayer must be unmarried
and must pay over half the cost of maintaining a home, which for
over half the year was the main home of the taxpayer and their
qualifying person, or they paid over half the cost of maintaining
,their parent's home for the entire year and claimed that parent on
their return.
◉ List at least four costs of maintaining a home: Answer: Among
other things, mortgage interest and real estate taxes (or rent),
fire/casualty (or renter's) insurance, upkeep and repairs, utilities,
and food consumed in the home are all costs of maintaining a home.
◉ What requirements must be met for a taxpayer to use the
qualifying widow(er) status? Answer: The death of the taxpayer's
spouse must have occurred during one of the two preceding tax
years; the taxpayer must not have remarried and must have been
entitled to file a joint return for the year of death. The taxpayer must
have paid over half the cost of maintaining the home, which was the
main home of their dependent son, daughter, stepson, or
stepdaughter for the entire year.
◉ In the case of divorced or separated parents, which parent
generally gets to claim the qualifying child? Answer: The custodial
parent, according to the IRS definition, which is the person with
whom the child spent more nights during the year.
◉ What is the exception to the rules for children of divorced or
separated parents? Answer: If a decree of divorce or separate
maintenance or written separation agreement that became effective
after October 4, 2004, and before January 1, 2009, states that the
noncustodial parent is entitled to claim the child's dependency
, exemption, or if the custodial parent executes a written declaration
that they will not claim the child as a dependent for that year, the
noncustodial parent may claim the qualifying child. For divorces
granted after December 31, 2008, Form 8332, Release/Revocation of
Release of Claim to Exemption for Child by Custodial Parent, must be
filed if parents are separating tax benefits.
◉ What happens when more than one taxpayer claims the same
qualifying child (QC)? Answer: The IRS will apply tiebreaker rules as
follows:
If only one of the taxpayers is the child's parent, the child is treated
as the qualifying child (QC) of the parent.
If the parents do not file a joint return together, but both parents
claim the child, the IRS will treat the child as the QC of the parent
with whom the child lived and stayed over for the greater number of
nights during the year. If the child lived with each parent and stayed
over the same number of nights during the year, the IRS will treat
the child as the QC of the parent with the highest AGI.
If neither parent can claim the child as a QC, the child is treated as
the QC of the person with the highest AGI for the year. This
particular tiebreaker rule does not allow any choice. Only the
taxpayer with the highest AGI can claim the child.
If either parent can claim the child but no parent does claim the
child, the child is treated as the QC of the person who had the
highest AGI for the year, but only if that person's AGI is greater than
COMPREHENSIVE QUESTIONS AND
SOLUTIONS FULL CREDIT GUIDE
◉ Is the Child Tax Credit refundable or nonrefundable? Answer: For
most taxpayers, the Child Tax Credit is fully refundable in 2021. In
other years, the Child Tax Credit is nonrefundable. However, certain
taxpayers may qualify for the Additional Child Tax Credit, which is
refundable.
◉ How much is the penalty if a paid preparer fails to meet the Child
Tax Credit due diligence requirements? Answer: There is a $545
penalty for failing to meet the CTC/ODC/ACTC due diligence
requirement on one taxpayer's return.
◉ What is the first due diligence requirement for the CTC/ODC, and
how does a paid preparer meet this requirement? Answer:
Complete and submit Form 8867, Paid Preparer's Earned Income
Credit Checklist.
The form must be completed thoroughly and conscientiously by the
paid preparer. One Form 8867 must be submitted with every e-filed
or paper-filed return (original and/or amended) for every taxpayer
,who claims the EIC, CTC/ODC/ACTC, AOTC, and/or uses the head of
household filing status.
◉ What filing statuses are available to taxpayers who are unmarried
Answer: Qualifying widow(er), head of household, and single.
◉ How may a married taxpayer qualify as unmarried for tax
purposes? Answer: To qualify as unmarried for the purpose of
claiming the head of household filing status, a taxpayer must meet
all of the following:
Not file a joint return with their spouse.
Provide more than half the cost of maintaining their home.
The home must be the main home for the taxpayer and their
dependent child (or child who would be a dependent except that the
exemption was given to the noncustodial parent) for more than six
months of the tax year.
The taxpayer's spouse must not have lived in the home during the
last six months of the year.
◉ What requirements must be met for a single taxpayer to qualify to
file as head of household? Answer: The taxpayer must be unmarried
and must pay over half the cost of maintaining a home, which for
over half the year was the main home of the taxpayer and their
qualifying person, or they paid over half the cost of maintaining
,their parent's home for the entire year and claimed that parent on
their return.
◉ List at least four costs of maintaining a home: Answer: Among
other things, mortgage interest and real estate taxes (or rent),
fire/casualty (or renter's) insurance, upkeep and repairs, utilities,
and food consumed in the home are all costs of maintaining a home.
◉ What requirements must be met for a taxpayer to use the
qualifying widow(er) status? Answer: The death of the taxpayer's
spouse must have occurred during one of the two preceding tax
years; the taxpayer must not have remarried and must have been
entitled to file a joint return for the year of death. The taxpayer must
have paid over half the cost of maintaining the home, which was the
main home of their dependent son, daughter, stepson, or
stepdaughter for the entire year.
◉ In the case of divorced or separated parents, which parent
generally gets to claim the qualifying child? Answer: The custodial
parent, according to the IRS definition, which is the person with
whom the child spent more nights during the year.
◉ What is the exception to the rules for children of divorced or
separated parents? Answer: If a decree of divorce or separate
maintenance or written separation agreement that became effective
after October 4, 2004, and before January 1, 2009, states that the
noncustodial parent is entitled to claim the child's dependency
, exemption, or if the custodial parent executes a written declaration
that they will not claim the child as a dependent for that year, the
noncustodial parent may claim the qualifying child. For divorces
granted after December 31, 2008, Form 8332, Release/Revocation of
Release of Claim to Exemption for Child by Custodial Parent, must be
filed if parents are separating tax benefits.
◉ What happens when more than one taxpayer claims the same
qualifying child (QC)? Answer: The IRS will apply tiebreaker rules as
follows:
If only one of the taxpayers is the child's parent, the child is treated
as the qualifying child (QC) of the parent.
If the parents do not file a joint return together, but both parents
claim the child, the IRS will treat the child as the QC of the parent
with whom the child lived and stayed over for the greater number of
nights during the year. If the child lived with each parent and stayed
over the same number of nights during the year, the IRS will treat
the child as the QC of the parent with the highest AGI.
If neither parent can claim the child as a QC, the child is treated as
the QC of the person with the highest AGI for the year. This
particular tiebreaker rule does not allow any choice. Only the
taxpayer with the highest AGI can claim the child.
If either parent can claim the child but no parent does claim the
child, the child is treated as the QC of the person who had the
highest AGI for the year, but only if that person's AGI is greater than
