HR BLOCK FINAL TEST REVIEW (ITC
2026) WITH COMPLETE SOLUTIONS
Which of the following is a requirement for all taxpayers who want to claim the EIC?
Live in the U.S. for more than half a year.
Have a valid social security number.
Have a qualifying child dependent.
Have AGI less than $21,430 ($27,380 MFJ). - ANSWER-Have a valid social security
number.
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. - ANSWER-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. - ANSWER-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. - ANSWER-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. - ANSWER-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 - ANSWER-$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. - ANSWER-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. - ANSWER-
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. - ANSWER-
Which of the following is NOT a percentage of social security benefits subject to
federal tax? Up to __________.
0%
50%
85%
100% - ANSWER-100%
What is the maximum amount of the lifetime learning credit?
$1,100 per return.
$1,650 per return.
$2,000 per return.
$2,500 per return. - ANSWER-$2,000 per return.
2026) WITH COMPLETE SOLUTIONS
Which of the following is a requirement for all taxpayers who want to claim the EIC?
Live in the U.S. for more than half a year.
Have a valid social security number.
Have a qualifying child dependent.
Have AGI less than $21,430 ($27,380 MFJ). - ANSWER-Have a valid social security
number.
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. - ANSWER-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. - ANSWER-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. - ANSWER-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. - ANSWER-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 - ANSWER-$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. - ANSWER-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. - ANSWER-
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. - ANSWER-
Which of the following is NOT a percentage of social security benefits subject to
federal tax? Up to __________.
0%
50%
85%
100% - ANSWER-100%
What is the maximum amount of the lifetime learning credit?
$1,100 per return.
$1,650 per return.
$2,000 per return.
$2,500 per return. - ANSWER-$2,000 per return.
