HR BLOCK FINAL TEST REVIEW (ITC
2025) QUESTIONS AND ANSWERS
Which iof ithe ifollowing iis ia irequirement ifor iall itaxpayers iwho iwant ito iclaim ithe
iEIC?
Live iin ithe iU.S. ifor imore ithan ihalf ia iyear.
Have ia ivalid isocial isecurity inumber.
Have ia iqualifying ichild idependent.
Have iAGI iless ithan i$21,430 i($27,380 iMFJ). i- icorrect ianswers i-Have ia ivalid
isocial isecurity inumber.
A icombined idue idiligence ipenalty iof i$2,180 iwould iindicate ia ipenalty ifor iwhich iof
ithe ifollowing?
EIC, iCTC/ODC/ACTC, iand ihead iof ihousehold.
EIC, iAOTC, iand iCTC/ODC/ACTC.
EIC, iAOTC, iCTC/ODC/ACTC, iand ihead iof ihousehold.
EIC, iPTC, iCTC/ODC/ACTC, iand ihead iof ihousehold. i- icorrect ianswers i-EIC,
iAOTC, iCTC/ODC/ACTC, iand ihead iof ihousehold.
When idependent icare ibenefits iare iwithheld ifrom ia itaxpayer's iincome, iwhere iare
ithey ireported iby ithe iemployer?
i
Form i2441.
iForm i1040.
iBox i10 iof iForm iW-2.
,iThe iemployer iis inot irequired ito ireport ithem. i- icorrect ianswers i-Box i10 iof iForm
iW-2.
All iof ithe ifollowing iare idue idiligence irequirements ia itax ipreparer imust imeet ifor
iEIC, iAOTC, iCTC/ODC/ACTC, iand iHOH, iEXCEPT:
i
Investigate iand iverify ithe iaccuracy iof iinformation ithe itaxpayer iprovides ito ishow
ieligibility ifor iEIC, iAOTC, iCTC/ODC/ACTC, iand iHOH.
i
Complete iall iworksheets iused ito icompute ithe icredits. iIf ithe iworksheet iis
icompleted iby ihand, ikeep ia icopy iin ithe itaxpayer's iclient ifile.
i
Maintain ia icopy iof idocuments iprovided iby ithe itaxpayer ithat ithe itax ipreparer
irelied ion iwhen idetermining icredit ieligibility. iThen irecord ithe idate ithe iinformation
iwas iobtained iand ithe iname iof iwho iprovided ithe iinformation.
i
When iinformation iprovided iby ithe itaxpayer iappears ito ibe iincorrect, iinconsistent,
ior iincomplete, ithe itax ipreparer imust imake iadditional iinquiries ito idetermine iif ithe
itaxpayer iis ieligible ifor ithe ibenefit. iThen idocument iboth ithe iquestions iasked iand
iresponses iprovided. i- icorrect ianswers i-Investigate iand iverify ithe iaccuracy iof
iinformation ithe itaxpayer iprovides ito ishow ieligibility ifor iEIC, iAOTC,
iCTC/ODC/ACTC, iand iHOH.
When ia itaxpayer ireceives iForm i1099-R iwith ino iamount ientered iin ibox i2a iand
icode i7 ientered iin ibox i7, ithe ientire idistribution:
Could ibe ipartly ior ientirely itaxable.
Is inever itaxable.
Is ian iearly idistribution iand itaxable.
Has ibeen irolled iinto ia itraditional iIRA ior iinto ianother iqualified iplan. i- icorrect
ianswers i-Is inever itaxable.
What iis ithe imaximum iamount iof ithe iAmerican iOpportunity iTax iCredit ia itaxpayer
icould ireceive iper istudent?
i$1,650
i$1,800
i$2,000
i$2,500 i- icorrect ianswers i-$2,500
Which itest ifor ia iqualifying ichild idoes iNOT ineed ito ibe imet iin iorder ifor ithe ichild ito
ibe ia iqualifying iperson ifor ipurposes iof iEarned iIncome iCredit i(EIC)?
iAge.
iRelationship.
iResidency.
iSupport. i- icorrect ianswers i-Support.
Which iof ithe ifollowing iexpenses iqualifies ifor ian ieducation icredit iin i2021?
iTuition ipayments. iThe itaxpayer ididn't ireceive ischolarships, igrants, ior iother
inontaxable ibenefits.
iFees ifor ian ioptional istudent iactivity.
iCost iof istudent imedical ifees.
, iTuition ipayments. iThe itaxpayer ireceived ia inontaxable igrant, iwhich icovered ithe
ientire ituition iexpense. i- icorrect ianswers i-
Employer-provided idependent icare iassistance:
iMay ibe iused ifor ithe iChild iand iDependent iCare iCredit.
iIs isubtracted ifrom ithe itotal iexpenses ifor ichild ior idependent icare ion iForm i2441.
iIs iincluded iin iwages ion iForm iW-2.
iIs inot ireported ito ithe iIRS. i- icorrect ianswers i-
Which iof ithe ifollowing iis iNOT ia ipercentage iof isocial isecurity ibenefits isubject ito
ifederal itax? iUp ito i__________.
i0%
i50%
i85%
i100% i- icorrect ianswers i-100%
What iis ithe imaximum iamount iof ithe ilifetime ilearning icredit?
$1,100 iper ireturn.
$1,650 iper ireturn.
$2,000 iper ireturn.
$2,500 iper ireturn. i- icorrect ianswers i-$2,000 iper ireturn.
Employer-provided idependent icare iassistance:
It imay ibe iused ifor ithe iChild iand iDependent iCare iCredit.
It iis isubtracted ifrom ithe itotal iexpenses ifor ithe ichild ior idependent icare ion iForm
i2441.
It iis iincluded iin iwages ion iForm iW-2.
It iis inot ireported ito ithe iIRS. i- icorrect ianswers i-
Earned iIncome i- icorrect ianswers i-Any iincome i(wages/salary) ithat iis igenerated iby
iworking
Unearned iIncome i- icorrect ianswers i-include iinterest iincome, idividends, irents iand
iroyalties, ipensions, ialimony, iand iunemployment iincome.
If ian iemployee ithinks itheir iForm iW-2 iis iincorrect, iwhat ishould ithey ido? i- icorrect
ianswers i-If ithe itaxpayer's iname, isocial isecurity inumber, iearnings, ior iwithholdings
iare iincorrect, ithe itaxpayer ishould inotify itheir iemployer iand irequest ia icorrected
iForm iW-2. iThe iemployee ishould irequest ithat ithe iemployer iupdate itheir irecords
iand iverify ithat ithe iearnings iwere iproperly icredited iwith ithe iSocial iSecurity
iAdministration. iHowever, ithe itaxpayer iis istill iresponsible ifor ifiling ia itimely itax
ireturn. iIf ithe iemployee's iattempts ito iobtain ia icorrected iForm iW-2 ifrom itheir
iemployer iare inot isuccessful, ithe itaxpayer ishould inotify ithe iIRS. iIt imay ibe
inecessary ito iprepare ia isubstitute iForm iW-2.
Is iinterest ireceived ion iU.S. iTreasury iobligations itaxable ion istate iand/or ilocal
ireturns? i- icorrect ianswers i-No. iInterest ion iU.S. iTreasury iobligations iis iexempt
ifrom istate iand ilocal itax iby ifederal ilaw.
2025) QUESTIONS AND ANSWERS
Which iof ithe ifollowing iis ia irequirement ifor iall itaxpayers iwho iwant ito iclaim ithe
iEIC?
Live iin ithe iU.S. ifor imore ithan ihalf ia iyear.
Have ia ivalid isocial isecurity inumber.
Have ia iqualifying ichild idependent.
Have iAGI iless ithan i$21,430 i($27,380 iMFJ). i- icorrect ianswers i-Have ia ivalid
isocial isecurity inumber.
A icombined idue idiligence ipenalty iof i$2,180 iwould iindicate ia ipenalty ifor iwhich iof
ithe ifollowing?
EIC, iCTC/ODC/ACTC, iand ihead iof ihousehold.
EIC, iAOTC, iand iCTC/ODC/ACTC.
EIC, iAOTC, iCTC/ODC/ACTC, iand ihead iof ihousehold.
EIC, iPTC, iCTC/ODC/ACTC, iand ihead iof ihousehold. i- icorrect ianswers i-EIC,
iAOTC, iCTC/ODC/ACTC, iand ihead iof ihousehold.
When idependent icare ibenefits iare iwithheld ifrom ia itaxpayer's iincome, iwhere iare
ithey ireported iby ithe iemployer?
i
Form i2441.
iForm i1040.
iBox i10 iof iForm iW-2.
,iThe iemployer iis inot irequired ito ireport ithem. i- icorrect ianswers i-Box i10 iof iForm
iW-2.
All iof ithe ifollowing iare idue idiligence irequirements ia itax ipreparer imust imeet ifor
iEIC, iAOTC, iCTC/ODC/ACTC, iand iHOH, iEXCEPT:
i
Investigate iand iverify ithe iaccuracy iof iinformation ithe itaxpayer iprovides ito ishow
ieligibility ifor iEIC, iAOTC, iCTC/ODC/ACTC, iand iHOH.
i
Complete iall iworksheets iused ito icompute ithe icredits. iIf ithe iworksheet iis
icompleted iby ihand, ikeep ia icopy iin ithe itaxpayer's iclient ifile.
i
Maintain ia icopy iof idocuments iprovided iby ithe itaxpayer ithat ithe itax ipreparer
irelied ion iwhen idetermining icredit ieligibility. iThen irecord ithe idate ithe iinformation
iwas iobtained iand ithe iname iof iwho iprovided ithe iinformation.
i
When iinformation iprovided iby ithe itaxpayer iappears ito ibe iincorrect, iinconsistent,
ior iincomplete, ithe itax ipreparer imust imake iadditional iinquiries ito idetermine iif ithe
itaxpayer iis ieligible ifor ithe ibenefit. iThen idocument iboth ithe iquestions iasked iand
iresponses iprovided. i- icorrect ianswers i-Investigate iand iverify ithe iaccuracy iof
iinformation ithe itaxpayer iprovides ito ishow ieligibility ifor iEIC, iAOTC,
iCTC/ODC/ACTC, iand iHOH.
When ia itaxpayer ireceives iForm i1099-R iwith ino iamount ientered iin ibox i2a iand
icode i7 ientered iin ibox i7, ithe ientire idistribution:
Could ibe ipartly ior ientirely itaxable.
Is inever itaxable.
Is ian iearly idistribution iand itaxable.
Has ibeen irolled iinto ia itraditional iIRA ior iinto ianother iqualified iplan. i- icorrect
ianswers i-Is inever itaxable.
What iis ithe imaximum iamount iof ithe iAmerican iOpportunity iTax iCredit ia itaxpayer
icould ireceive iper istudent?
i$1,650
i$1,800
i$2,000
i$2,500 i- icorrect ianswers i-$2,500
Which itest ifor ia iqualifying ichild idoes iNOT ineed ito ibe imet iin iorder ifor ithe ichild ito
ibe ia iqualifying iperson ifor ipurposes iof iEarned iIncome iCredit i(EIC)?
iAge.
iRelationship.
iResidency.
iSupport. i- icorrect ianswers i-Support.
Which iof ithe ifollowing iexpenses iqualifies ifor ian ieducation icredit iin i2021?
iTuition ipayments. iThe itaxpayer ididn't ireceive ischolarships, igrants, ior iother
inontaxable ibenefits.
iFees ifor ian ioptional istudent iactivity.
iCost iof istudent imedical ifees.
, iTuition ipayments. iThe itaxpayer ireceived ia inontaxable igrant, iwhich icovered ithe
ientire ituition iexpense. i- icorrect ianswers i-
Employer-provided idependent icare iassistance:
iMay ibe iused ifor ithe iChild iand iDependent iCare iCredit.
iIs isubtracted ifrom ithe itotal iexpenses ifor ichild ior idependent icare ion iForm i2441.
iIs iincluded iin iwages ion iForm iW-2.
iIs inot ireported ito ithe iIRS. i- icorrect ianswers i-
Which iof ithe ifollowing iis iNOT ia ipercentage iof isocial isecurity ibenefits isubject ito
ifederal itax? iUp ito i__________.
i0%
i50%
i85%
i100% i- icorrect ianswers i-100%
What iis ithe imaximum iamount iof ithe ilifetime ilearning icredit?
$1,100 iper ireturn.
$1,650 iper ireturn.
$2,000 iper ireturn.
$2,500 iper ireturn. i- icorrect ianswers i-$2,000 iper ireturn.
Employer-provided idependent icare iassistance:
It imay ibe iused ifor ithe iChild iand iDependent iCare iCredit.
It iis isubtracted ifrom ithe itotal iexpenses ifor ithe ichild ior idependent icare ion iForm
i2441.
It iis iincluded iin iwages ion iForm iW-2.
It iis inot ireported ito ithe iIRS. i- icorrect ianswers i-
Earned iIncome i- icorrect ianswers i-Any iincome i(wages/salary) ithat iis igenerated iby
iworking
Unearned iIncome i- icorrect ianswers i-include iinterest iincome, idividends, irents iand
iroyalties, ipensions, ialimony, iand iunemployment iincome.
If ian iemployee ithinks itheir iForm iW-2 iis iincorrect, iwhat ishould ithey ido? i- icorrect
ianswers i-If ithe itaxpayer's iname, isocial isecurity inumber, iearnings, ior iwithholdings
iare iincorrect, ithe itaxpayer ishould inotify itheir iemployer iand irequest ia icorrected
iForm iW-2. iThe iemployee ishould irequest ithat ithe iemployer iupdate itheir irecords
iand iverify ithat ithe iearnings iwere iproperly icredited iwith ithe iSocial iSecurity
iAdministration. iHowever, ithe itaxpayer iis istill iresponsible ifor ifiling ia itimely itax
ireturn. iIf ithe iemployee's iattempts ito iobtain ia icorrected iForm iW-2 ifrom itheir
iemployer iare inot isuccessful, ithe itaxpayer ishould inotify ithe iIRS. iIt imay ibe
inecessary ito iprepare ia isubstitute iForm iW-2.
Is iinterest ireceived ion iU.S. iTreasury iobligations itaxable ion istate iand/or ilocal
ireturns? i- icorrect ianswers i-No. iInterest ion iU.S. iTreasury iobligations iis iexempt
ifrom istate iand ilocal itax iby ifederal ilaw.
