ACC 330 Project One Milestone One Template

Research to compare tax credits and their corresponding forms.

Compare the current tax year with the prior tax year (for instance, 2021 and 2020).

Research the forms required for the respective tax year and complete the table.

Follow the example provided for Earned Income Tax Credit (EITC).

Hint: Changes in requirement and parameter may include the following areas: amount of credit, income thresholds, qualified dependents and/or filing status.

Note: All tax credits will be different and will contain varying amounts of information based on changes you observe over time.

EXAMPLE: Form 1040 Earned Income Tax Credit (EIC)

Address the following:	Specify changes, uses, developments:
Example of when this may apply using professional terms to describe clients Changes to the form from year A to year B Changes to areas to consider from year to year Possible new developments and why they may occur	The Earned Income Tax Credit (EITC), also referred to as EIC,helps low-to-moderate income workers and their families by potentially reducing the taxes they owe and potentially increasing their refund. The credit varies depending on the taxpayers income, if they have any children or other dependents, if they are disabled, and/or if they meet other criteria. The taxpayer must have earned income to qualify, which includes taxable income or wages from working for someone else, yourself, or a business you own. Required forms The EITC is reported directly on Form 1040, but the line may change from year to year. For example, for 2020, EITC was reported on Form 1040, page 2, line 27 but for 2021, EITC was reported on Form 1040, page 2, line 27a (and includes lines 27a-c). Schedule EIC is filed for taxpayers with qualifying children, however, there are not notable differences between the schedule for 2020 to 2021. For detailed examples of calculating the EITC and how to complete the applicable forms, refer to Publication 596. Changes to consider The criteria for adjusted gross income and the number of children or relatives claimed for the tax year impact the calculation of this credit. For example, in 2020, the maximum credit that could be claimed by a taxpayer filing as single with zero children claimed, whose AGI was between $15,820 to $21,710, was $538. In 2021, however, the maximum credit that could be claimed by a taxpayer filing as single with zero children claimed whose AGI was between $21,430 to $27,380, was $1,502. New developments The example provided above, noting such as an increase in the EITC from 2020 to 2021 for the same scenario, was a result of expanded tax credits for taxpayers filing without dependent children for 2021, and there are also changes for beyond 2021 relating to the credit. Refer to the IRS Article below titled IRS: Expanded credits for families highlight tax changes for 2021; many people who dont normally file should file this year.
Documentation if applicable(statements from taxpayer(s), other substantiating proof, official IRS tax forms provided to the taxpayer(s), etc.)	Per IRS Publication 596, the IRS might request copies of the following to substantiate the EITC: birth certificates, school records, childcare records, documents reflecting childs address, etc. Form 8867 is also required to be filed when claiming the EITC. Form 8867 requires other due diligence to be performed, including a separate section on the form just related to the EITC. Refer to the current version of Form 8867.
Citations Include related IRS publications, IRS articles, tax forms for each year used for comparison, and any other supporting research	IRS publication Publication 596, Earned Income Credit (EIC) - 2020. https://www.irs.gov/pub/irs-prior/p596--2020.pdf IRS publication Publication 596, Earned Income Credit (EIC) - 2021. https://www.irs.gov/pub/irs-pdf/p596.pdf (Note: This link is subject to change as it links to the most recent tax year automatically. If the form is updated by the IRS, the tax year reflected may change. If so, search for the applicable tax form year directly.) IRS Article Earned Income and Earned Income Tax Credit (EITC) Tables. IRS.gov. August 25, 2022. https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/earned-income-and-earned-income-tax-credit-eitc-tables. IRS Article Who Qualifies for the Earned Income Tax Credit (EITC). IRS.gov. July 14, 2022. https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/who-qualifies-for-the-earned-income-tax-credit-eitc. IRS Article IRS: Expanded Credits for Families Highlight Tax Changes for 2021; Many People Who Dont Normally File Should File Fhis Year. IRS.gov. February 2022. https://www.irs.gov/newsroom/irs-expanded-credits-for-families-highlight-tax-changes-for-2021-many-people-who-dont-normally-file-should-file-this-year. 2020 Form 1040 (see page 2, line 27) https://www.irs.gov/pub/irs-prior/f1040--2020.pdf. 2021 Form 1040 (see page 2, line 27a) https://www.irs.gov/pub/irs-pdf/f1040.pdf. (Note: This link is subject to change as it links to the most recent tax year automatically. If the form is updated by the IRS, the tax year reflected may change. If so, search for the applicable tax form year directly.) 2020 Schedule EIC https://www.irs.gov/pub/irs-prior/f1040sei--2020.pdf. 2021 Schedule EIC https://www.irs.gov/pub/irs-pdf/f1040sei.pdf. (Note: This link is subject to change as it links to the most recent tax year automatically. If the form is updated by the IRS, the tax year reflected may change. If so, search for the applicable tax form year directly.) Form 8867, Paid Preparers Due Diligence Checklist https://www.irs.gov/pub/irs-pdf/f8867.pdf

1. Form 8863 Education Tax Credit American Opportunity Tax Credit (AOTC)

Address the following:	Specify changes, uses, developments:
Example of when this may apply using professional terms to describe clients Changes to the form from year A to year B Changes to areas to consider from year to year Possible new developments and why they may occur
Documentation if applicable (statements from taxpayer(s), other substantiating proof, official IRS tax forms provided to the taxpayer(s), etc.)
Citations Include related IRS publications, IRS articles, tax forms for each year used for comparison, and any other supporting research

2. Form 8863 Lifetime Learning Credit (LLC)

Address the following:	Specify changes, uses, developments
Example of when this may apply using professional terms to describe clients Changes to the form from year A to year B Changes to areas to consider from year to year Possible new developments and why they may occur
Documentation if applicable (statements from taxpayer(s), other substantiating proof, official IRS tax forms provided to the taxpayer(s), etc.)
Citations Include related IRS publications, IRS articles, tax forms for each year used for comparison, and any other supporting research

3. Form 8812 Child Tax Credit

Address the following:	Specify changes, uses, developments:
Example of when this may apply using professional terms to describe clients Changes to the form from year A to year B Changes to areas to consider from year to year Possible new developments and why they may occur
Documentation if applicable (statements from taxpayer(s), other substantiating proof, official IRS tax forms provided to the taxpayer(s), etc.)
Citations Include related IRS publications, IRS articles, tax forms for each year used for comparison, and any other supporting research

4. Form 8812 Other Dependent Credit

Address the following:	Specify changes, uses, developments:
Example of when this may apply using professional terms to describe clients Changes to the form from year A to year B Changes to areas to consider from year to year Possible new developments and why they may occur
Documentation if applicable (statements from taxpayer(s), other substantiating proof, official IRS tax forms provided to the taxpayer(s), etc.)
Citations Include related IRS publications, IRS articles, tax forms for each year used for comparison, and any other supporting research

5. Form 2441 Child and Dependent Care Credit

Address the following:	Specify changes, uses, developments:
Example of when this may apply using professional terms to describe clients Changes to the form from year A to year B Changes to areas to consider from year to year Possible new developments and why they may occur
Documentation if applicable (statements from taxpayer(s), other substantiating proof, official IRS tax forms provided to the taxpayer(s), etc.)
Citations Include related IRS publications, IRS articles, tax forms for each year used for comparison, and any other supporting research