ENROLLED AGENT PART 1 PRACTICE SET 2026
SOLVED CONTENT
◉ Age Requirement for QCD. Answer: Must be at least age 70.5 at
the time of distribution.
◉ Annual Limit for QCD. Answer: Total QCDs for the year cannot be
more than $100,000 ($200,000 if MFJ).
◉ QCD Limitation. Answer: The QCD is limited to the amount of the
distribution that would otherwise be income.
◉ Individual tax identification number (ITIN):. Answer: ITIN does
not authorize work in the U.S. or provide eligibility for Social
Security benefits or the Earned Income Tax Credit.
Any ITIN that is not used on a federal tax return for three
consecutive tax years will expire.
A taxpayer can't electronically file (e-file) a return using an ITIN in
the calendar year the ITIN is assigned.
,◉ identification number (TIN). Answer: Everybody on the tax
return, including dependents, needs a valid taxpayer identification
number (TIN) issued by the due date of the return (including
extensions). There is an exception for a child that is born and dies in
the same year.
A TIN is a Social Security number (SSN), an individual taxpayer
identification number (ITIN), or an adoption taxpayer identification
number (ATIN).
◉ Earned Income Credit. Answer: Child Tax Credit, and Additional
Child Tax Credit requires a valid SSN only.,
Under the American Rescue Plan Act of 2021, for 2021 and future
years, if a qualifying child does not have a valid SSN, the taxpayer
may claim the earned income credit for individuals with no
qualifying children.
Credit for Other Dependents and American Opportunity Credit
requires a valid SSN, ITIN, or ATIN.
◉ diligence penalty. Answer: For any failure relating to a return or
claim for refund filed in 2023 (generally 2022 tax returns filed in
2023), the penalty is $560 for each failure with no maximum penalty
unless the failure is due to reasonable cause and not willful neglect.
Failure to be diligent in determining eligibility for certain tax
benefits, including the Earned Income Credit, American Opportunity
,Credit, Child Tax Credit (including Additional Child Tax Credit and
Credit for Other Dependents), and Head of Household filing status.
Preparer must ask all questions required on Form 8867 and also ask
additional questions when information seems incorrect,
inconsistent, or incomplete. Preparer must also verify identity,
prepare a computational checklist (Form 8867 or equivalent), and
meet a recordkeeping requirement.
◉ Custodial parent. Answer: The custodial parent is the parent with
whom the child lived for the greater number of nights during the
year. Only the custodial parent is entitled to claim the child for head
of household filing status, the credit for child and dependent care
expenses, the exclusion for dependent care benefits, the earned
income credit, and the health coverage tax credit.
The custodial parent can file Form 8332 allowing the noncustodial
parent to claim the child for the child tax credit, additional child tax
credit, and the credit for other dependents.
Where Taxpayer Is Required to File a Return,
Net earnings from self-employment are $400 or more.
Church wages are $108.28 or more (from a church that is FICA
exempt).
The taxpayer (or spouse, if filing jointly) received HSA, Archer MSA,
or Medicare Advantage MSA distributions.
, Advance payments of the premium tax credit were made for the
taxpayer, spouse, or a dependent who enrolled in coverage through
the Health Insurance Marketplace.
The taxpayer owes special taxes (e.g., household employment taxes)
or must recapture certain credits or taxes.
◉ Single Dependent (Who May Be Claimed by Another Taxpayer)
Must File a Return If Any of the Following Apply in 2023. Answer:
Unearned income more than $1,250 ($3,000 if blind or 65 or older,
$4,750 if blind and 65 or older).
Earned income more than $13,850 ($15,700 if blind or 65 or older,
$17,450 if blind and 65 or older).
Gross income more than the larger of:
$1,250 ($3,000 if blind or 65 or older, $4,750 if blind and 65 or
older), or
Earned income (up to $12,950) plus $400 (plus $2,150 if blind or 65
or older, plus $3,900 if blind and 65 or older).
◉ Income Threshold 2023. Answer: Single: $13,850 ($15,700 if 65
or older).
Head of Household: $20,800 ($22,650 if 65 or older).
Married Filing Jointly: $27,700 ($29,100 if one spouse 65 or older,
$30,500 if both spouses 65 or older).
Qualifying Surviving Spouse: $27,700 ($29,100 if 65 or older).
Married Filing Separately: $5 (any age).
SOLVED CONTENT
◉ Age Requirement for QCD. Answer: Must be at least age 70.5 at
the time of distribution.
◉ Annual Limit for QCD. Answer: Total QCDs for the year cannot be
more than $100,000 ($200,000 if MFJ).
◉ QCD Limitation. Answer: The QCD is limited to the amount of the
distribution that would otherwise be income.
◉ Individual tax identification number (ITIN):. Answer: ITIN does
not authorize work in the U.S. or provide eligibility for Social
Security benefits or the Earned Income Tax Credit.
Any ITIN that is not used on a federal tax return for three
consecutive tax years will expire.
A taxpayer can't electronically file (e-file) a return using an ITIN in
the calendar year the ITIN is assigned.
,◉ identification number (TIN). Answer: Everybody on the tax
return, including dependents, needs a valid taxpayer identification
number (TIN) issued by the due date of the return (including
extensions). There is an exception for a child that is born and dies in
the same year.
A TIN is a Social Security number (SSN), an individual taxpayer
identification number (ITIN), or an adoption taxpayer identification
number (ATIN).
◉ Earned Income Credit. Answer: Child Tax Credit, and Additional
Child Tax Credit requires a valid SSN only.,
Under the American Rescue Plan Act of 2021, for 2021 and future
years, if a qualifying child does not have a valid SSN, the taxpayer
may claim the earned income credit for individuals with no
qualifying children.
Credit for Other Dependents and American Opportunity Credit
requires a valid SSN, ITIN, or ATIN.
◉ diligence penalty. Answer: For any failure relating to a return or
claim for refund filed in 2023 (generally 2022 tax returns filed in
2023), the penalty is $560 for each failure with no maximum penalty
unless the failure is due to reasonable cause and not willful neglect.
Failure to be diligent in determining eligibility for certain tax
benefits, including the Earned Income Credit, American Opportunity
,Credit, Child Tax Credit (including Additional Child Tax Credit and
Credit for Other Dependents), and Head of Household filing status.
Preparer must ask all questions required on Form 8867 and also ask
additional questions when information seems incorrect,
inconsistent, or incomplete. Preparer must also verify identity,
prepare a computational checklist (Form 8867 or equivalent), and
meet a recordkeeping requirement.
◉ Custodial parent. Answer: The custodial parent is the parent with
whom the child lived for the greater number of nights during the
year. Only the custodial parent is entitled to claim the child for head
of household filing status, the credit for child and dependent care
expenses, the exclusion for dependent care benefits, the earned
income credit, and the health coverage tax credit.
The custodial parent can file Form 8332 allowing the noncustodial
parent to claim the child for the child tax credit, additional child tax
credit, and the credit for other dependents.
Where Taxpayer Is Required to File a Return,
Net earnings from self-employment are $400 or more.
Church wages are $108.28 or more (from a church that is FICA
exempt).
The taxpayer (or spouse, if filing jointly) received HSA, Archer MSA,
or Medicare Advantage MSA distributions.
, Advance payments of the premium tax credit were made for the
taxpayer, spouse, or a dependent who enrolled in coverage through
the Health Insurance Marketplace.
The taxpayer owes special taxes (e.g., household employment taxes)
or must recapture certain credits or taxes.
◉ Single Dependent (Who May Be Claimed by Another Taxpayer)
Must File a Return If Any of the Following Apply in 2023. Answer:
Unearned income more than $1,250 ($3,000 if blind or 65 or older,
$4,750 if blind and 65 or older).
Earned income more than $13,850 ($15,700 if blind or 65 or older,
$17,450 if blind and 65 or older).
Gross income more than the larger of:
$1,250 ($3,000 if blind or 65 or older, $4,750 if blind and 65 or
older), or
Earned income (up to $12,950) plus $400 (plus $2,150 if blind or 65
or older, plus $3,900 if blind and 65 or older).
◉ Income Threshold 2023. Answer: Single: $13,850 ($15,700 if 65
or older).
Head of Household: $20,800 ($22,650 if 65 or older).
Married Filing Jointly: $27,700 ($29,100 if one spouse 65 or older,
$30,500 if both spouses 65 or older).
Qualifying Surviving Spouse: $27,700 ($29,100 if 65 or older).
Married Filing Separately: $5 (any age).
