TAX CREDIT SPECIALIST CERTIFICATION
EXAM 2026 AND 2027 MASTER GUIDE FULL
QUESTIONS AND 100% CORRECT ANSWERS
GRADED A PLUS.
◎ What actions can a qualifying child or relative not take to maintain their dependent
status? ANSWER:- They cannot claim a dependent on their own return, claim a jointly
filing spouse as their dependent, or file as married filing jointly unless solely for a refund.
◎ What is the Foreign Tax Credit? ANSWER:- A credit for taxes paid to a foreign
country or U.S. territory, typically for income, excess profits, and war profits.
◎ What is the Child Tax Credit for the 2025 tax year? ANSWER:- A credit of up to
$2,000 per dependent.
◎ What is the Adoption Credit for the 2025 tax year? ANSWER:- A credit of up to
$17,280 for qualified adoption expenses.
◎ What does the American Opportunity Tax Credit (AOTC) provide? ANSWER:- Up to
$2,500 per eligible student.
◎ What is the Lifetime Learning Credit (LLC) capped at? ANSWER:- Capped at $2,000.
◎ What is required to access the AOTC or LLC? ANSWER:- The taxpayer or their
dependent must have been issued Form 1098-T, Tuition Statement.
◎ What is the modified adjusted gross income (MAGI) limit for full AOTC or LLC credits
for single individuals? ANSWER:- MAGI of $80,000 or less.
◎ What happens if a single individual's MAGI is between $80,000 and $90,000?
ANSWER:- They are eligible for reduced amounts of the credits.
◎ What is the maximum MAGI for claiming AOTC or LLC credits? ANSWER:- Single
individuals with a MAGI over $90,000 cannot claim either credit.
◎ For how many years can the AOTC be claimed? ANSWER:- Only for students in
their first four years of higher education.
◎ How many years can the LLC be claimed? ANSWER:- An unlimited number of years.
, ◎ What is the withholding rate for bonuses considered supplemental wages?
ANSWER:- 22 percent for bonuses of $1 million or less during the tax year.
◎ What is a non-refundable tax credit? ANSWER:- A tax credit that does not pay the
excess amount back to the taxpayer.
◎ What is a refundable tax credit? ANSWER:- A tax credit that allows the taxpayer to
receive a refund payment if the credit exceeds their tax liability.
◎ What are common examples of refundable tax credits? ANSWER:- Child Tax Credit,
American Opportunity Tax Credit, Premium Tax Credit, Earned Income Tax Credit.
◎ How are disability retirement payments classified for Earned Income Tax Credit
(EITC) purposes? ANSWER:- Payments received before the minimum retirement age
are classified as earned income.
◎ Are disability payments made after reaching the minimum retirement age considered
earned income for EITC? ANSWER:- No, they are not considered earned income.
◎ What should an Enrolled Agent do with previous IRS correspondence? ANSWER:-
Review it and determine the necessary course of action for the taxpayer.
◎ What might the IRS notify a taxpayer about in correspondence? ANSWER:- An
unpaid balance, a change in refund, a question about their return, or verification of
identity.
◎ What should a taxpayer do if they receive IRS correspondence requesting identity
verification? ANSWER:- They should not respond to requests for their identity protection
pin (IP PIN) as the IRS will never ask for it.
◎ What types of employment taxes must be paid by individuals? ANSWER:- Certain
types of employment taxes must be paid even if the individual is not a traditional
employer or business owner.
◎ What percentage must be withheld from household workers' wages for Social
Security and Medicare tax in 2025? ANSWER:- 7.65 percent
◎ What form must be completed for each household employee earning $2,800 or more
in cash? ANSWER:- Form W-2, Wage and Tax Statement
◎ What form must be filed for certain gifts or generation-skipping transfers? ANSWER:-
Form 709
◎ What is the annual gift tax exclusion for the year 2025? ANSWER:- $19,000
EXAM 2026 AND 2027 MASTER GUIDE FULL
QUESTIONS AND 100% CORRECT ANSWERS
GRADED A PLUS.
◎ What actions can a qualifying child or relative not take to maintain their dependent
status? ANSWER:- They cannot claim a dependent on their own return, claim a jointly
filing spouse as their dependent, or file as married filing jointly unless solely for a refund.
◎ What is the Foreign Tax Credit? ANSWER:- A credit for taxes paid to a foreign
country or U.S. territory, typically for income, excess profits, and war profits.
◎ What is the Child Tax Credit for the 2025 tax year? ANSWER:- A credit of up to
$2,000 per dependent.
◎ What is the Adoption Credit for the 2025 tax year? ANSWER:- A credit of up to
$17,280 for qualified adoption expenses.
◎ What does the American Opportunity Tax Credit (AOTC) provide? ANSWER:- Up to
$2,500 per eligible student.
◎ What is the Lifetime Learning Credit (LLC) capped at? ANSWER:- Capped at $2,000.
◎ What is required to access the AOTC or LLC? ANSWER:- The taxpayer or their
dependent must have been issued Form 1098-T, Tuition Statement.
◎ What is the modified adjusted gross income (MAGI) limit for full AOTC or LLC credits
for single individuals? ANSWER:- MAGI of $80,000 or less.
◎ What happens if a single individual's MAGI is between $80,000 and $90,000?
ANSWER:- They are eligible for reduced amounts of the credits.
◎ What is the maximum MAGI for claiming AOTC or LLC credits? ANSWER:- Single
individuals with a MAGI over $90,000 cannot claim either credit.
◎ For how many years can the AOTC be claimed? ANSWER:- Only for students in
their first four years of higher education.
◎ How many years can the LLC be claimed? ANSWER:- An unlimited number of years.
, ◎ What is the withholding rate for bonuses considered supplemental wages?
ANSWER:- 22 percent for bonuses of $1 million or less during the tax year.
◎ What is a non-refundable tax credit? ANSWER:- A tax credit that does not pay the
excess amount back to the taxpayer.
◎ What is a refundable tax credit? ANSWER:- A tax credit that allows the taxpayer to
receive a refund payment if the credit exceeds their tax liability.
◎ What are common examples of refundable tax credits? ANSWER:- Child Tax Credit,
American Opportunity Tax Credit, Premium Tax Credit, Earned Income Tax Credit.
◎ How are disability retirement payments classified for Earned Income Tax Credit
(EITC) purposes? ANSWER:- Payments received before the minimum retirement age
are classified as earned income.
◎ Are disability payments made after reaching the minimum retirement age considered
earned income for EITC? ANSWER:- No, they are not considered earned income.
◎ What should an Enrolled Agent do with previous IRS correspondence? ANSWER:-
Review it and determine the necessary course of action for the taxpayer.
◎ What might the IRS notify a taxpayer about in correspondence? ANSWER:- An
unpaid balance, a change in refund, a question about their return, or verification of
identity.
◎ What should a taxpayer do if they receive IRS correspondence requesting identity
verification? ANSWER:- They should not respond to requests for their identity protection
pin (IP PIN) as the IRS will never ask for it.
◎ What types of employment taxes must be paid by individuals? ANSWER:- Certain
types of employment taxes must be paid even if the individual is not a traditional
employer or business owner.
◎ What percentage must be withheld from household workers' wages for Social
Security and Medicare tax in 2025? ANSWER:- 7.65 percent
◎ What form must be completed for each household employee earning $2,800 or more
in cash? ANSWER:- Form W-2, Wage and Tax Statement
◎ What form must be filed for certain gifts or generation-skipping transfers? ANSWER:-
Form 709
◎ What is the annual gift tax exclusion for the year 2025? ANSWER:- $19,000
