Question 29 of 73. Which of the following statements is FALSE regarding the rules for the Earned Income Credit? The investment income amount limit is $3,650. The taxpayer cannot file Form 2555, Foreign Earned Income. The taxpayer must be a U.S. citizen or resident alien all year. The taxpayer must have earned income. Mark for follow up Question 31 of 73. If a taxpayer's Earned Income Credit (EIC) was disallowed, what must the taxpayer do the next time they claim the EIC? Amend the previous year's tax return. Complete Form 8812, Credits for Qualifying Children and Other Dependents. File a grievance with the IRS. File Form 8862, Information to Claim Certain Credits After Disallowance. Mark for follow up ________________________________________

Question 32 of 73. Which of the following taxpayers qualifies for the Earned Income Credit? Allison (28) is filing as a single taxpayer with no dependents. Allison's earned income and adjusted gross income in 2021 was $24,900, all from wages. She had no other income. She is a U.S. citizen, lived in the United States for more than six months, and has a valid social security number that allows her to work. She did not have any foreign income and will not file Form 2555, Foreign Earned Income. Anwar (20) is filing as a single taxpayer with no dependents. Anwar's earned income and adjusted gross income in 2021 was $13,333, all from wages. He had no other income. He is a U.S. citizen, lived in the United States for more than six months, and has a valid social security number that allows him to work. He did not have any foreign income and will not file Form 2555, Foreign Earned Income. Rodney (38) and Serena (39) are married, filing a joint return. Rodneys income from wages was $19,781. Serena's income from wages was $31,564. They had no other income in 2021. Rodney and Serena had their first child, Caleb, in July 2021. All are U.S. citizens, lived in the United States for more than six months, and have valid social security numbers that allow them to work. They did not have any foreign income and will not file Form 2555, Foreign Earned Income. Wallace (40) is filing as a single taxpayer with no dependents. Wallaces earned income and adjusted gross income in 2021 was $22,199, all from wages. He had no other income. Wallace is a U.S. citizen, lived in the United States for more than six months, and has a valid social security number that allows him to work. He did not have any foreign income and will not file Form 2555, Foreign Earned Income. Mark for follow up ________________________________________

Question 33 of 73. To ensure a taxpayer meets the due diligence requirements for the Earned Income Credit (EIC), what are the four due diligence requirements? Complete Schedule 8812 (Form 1040), Credits for Qualifying Children and Other Dependents, submit all worksheets used to compute the credit, ask questions, and take notes. Complete and submit Form 8867, Paid Preparer's Due Diligence Checklist, complete and keep all worksheets used to compute the credit, satisfy the knowledge requirement, and satisfy the documentation requirement. File Form 8862, Information to Claim Certain Credits After Disallowance, review the information, determine if the information is reasonable, and take notes. Be knowledgeable, review the information, prepare the return, and file the tax return. Mark for follow up ________________________________________

Question 34 of 73. Stanley would like to claim his grandson, Bobby, as his qualifying child so he can claim the Earned Income Credit (EIC). However, Bobby's mother, Talia, is also eligible to claim Bobby as her qualifying child for EIC purposes. As Stanley's tax preparer, what information would you share with Stanley? As long as Stanley files before Talia, he may claim EIC based on Bobby, his qualifying child. Stanley may claim EIC based on Bobby if his adjusted gross income was higher than Talia's. Stanley and Talia may agree to each claim one-half of the EIC based on Bobby, their qualifying child. Talia holds a higher right and may claim EIC based on Bobby, because Talia is Bobby's parent. Mark for follow up ________________________________________