YVETTE BROOKS-WILLIAMS: OKAY, I SEE THAT WE ARE NEARING THE TOP OF THE HOUR AND JUST A FEW MINUTES. SO FOR THOSE OF YOU JUST JOINING, WE WANT TO WELCOME YOU TO TODAY'S WEBINAR, LOOKING TO TAX YEAR 2022: AMERICAN RESCUE PLAN TAX CHANGES TO EARNED INCOME TAX CREDIT AND OTHER CHILD-RELATED CREDITS. WE ARE GLAD YOU'RE JOINING US HERE TODAY. MY NAME IS YVETTE BROOKS-WILLIAMS, AND I'M A SENIOR STAKEHOLDER LIAISON WITH THE INTERNAL REVENUE SERVICE, AND I WILL BE YOUR MODERATOR FOR TODAY'S WEBINAR, WHICH IS SLATED FOR 75 MINUTES. BEFORE WE BEGIN, IF THERE IS ANYONE IN THE AUDIENCE THAT IS WITH THE MEDIA, PLEASE SEND AN EMAIL TO THE ADDRESS ON THE SLIDE AND BE SURE TO INCLUDE YOUR CONTACT INFORMATION AND THE NEWS PUBLICATION YOU'RE WITH. OUR MEDIA RELATIONS AND STAKEHOLDER LIAISON STAFF WILL ASSIST YOU AND ANSWER ANY QUESTIONS YOU MAY HAVE. AS A REMINDER, THIS WEBINAR WILL BE RECORDED AND POSTED TO THE IRS VIDEO PORTAL IN A FEW WEEKS. THIS PORTAL IS LOCATED AT WWW.IRSVIDEOS.GOV. PLEASE NOTE CONTINUING EDUCATION CREDIT OR CERTIFICATES OF COMPLETION ARE NOT OFFERED IF YOU VIEW ANY VERSION OF OUR WEBINARS AFTER THE LIVE BROADCAST.

AGAIN, WE HOPE YOU WON'T EXPERIENCE ANY TECHNOLOGY ISSUES, BUT IF YOU DO, THIS SLIDE SHOWS HELPFUL TIPS AND REMINDERS. WE'VE POSTED A TECHNICAL HELP DOCUMENT YOU CAN DOWNLOAD FROM THE MATERIALS SECTION ON THE LEFT SIDE OF YOUR SCREEN. IT PROVIDES THE MINIMUM SYSTEM REQUIREMENTS FOR VIEWING THIS WEBINAR ALONG WITH SOME BEST PRACTICES AND QUICK SOLUTIONS. IF YOU COMPLETE IT AND PASSED YOUR SYSTEM CHECK AND YOU'RE STILL HAVING PROBLEMS, TRY ONE OF THE FOLLOWING, CLOSE THE SCREEN WHERE YOU ARE VIEWING THE WEBINAR AND RELAUNCH IT OR CLICK ON YOUR SETTINGS ON YOUR BROWSER VIEWING SCREEN AND SELECT HLS. NOW, YOU SHOULD HAVE RECEIVED TODAY'S POWERPOINT IN A REMINDER EMAIL, BUT IF NOT, DON'T WORRY. YOU CAN DOWNLOAD IT BY CLICKING ON THE MATERIALS DROPDOWN ARROW ON THE LEFT SIDE OF YOUR SCREEN AS SHOWN ON THIS SLIDE, CLOSED CAPTIONING IS AVAILABLE FOR TODAY'S PRESENTATION. IF YOU'RE HAVING TROUBLE HEARING THE AUDIO THROUGH YOUR COMPUTER SPEAKERS, PLEASE CLICK THE CLOSED CAPTIONING DROPDOWN ARROW LOCATED ON THE LEFT SIDE OF YOUR SCREEN. THIS FEATURE WILL BE AVAILABLE THROUGHOUT THE WEBINAR. IF YOU HAVE A TOPIC SPECIFIC QUESTION TODAY, PLEASE SUBMIT IT BY CLICKING THE ASK QUESTION DROPDOWN ARROW TO REVEAL THE TEXT BOX, TYPE YOUR QUESTION IN THE TEXT BOX AND THEN CLICK SEND. BUT ONE THING WE NEED YOU TO DO, AND THIS IS VERY IMPORTANT, PLEASE DO NOT ENTER ANY SENSITIVE OR TAXPAYER SPECIFIC INFORMATION INTO THE ASK QUESTION BOX. NOW DURING THE PRESENTATION, WE'LL TAKE A FEW BREAKS TO SHARE KNOWLEDGE BASED QUESTIONS WITH YOU, AND AT THOSE TIMES, A POLLING STYLE FEATURE WILL POP UP ON YOUR SCREEN WITH A QUESTION AND MULTIPLE CHOICE ANSWERS. SELECT THE RESPONSE YOU BELIEVE IS CORRECT BY CLICKING ON THE RADIO BUTTON NEXT TO YOUR SELECTION AND THEN CLICK SUBMIT. NOW, SOME PEOPLE MAY NOT GET THE POLLING QUESTION AND THIS COULD BE BECAUSE YOU HAVE YOUR POP-UP BLOCKER ON, SO PLEASE TAKE A MOMENT TO DISABLE YOUR POP-UP BLOCKER NOW SO THAT YOU CAN ANSWER THE QUESTIONS. WE'VE INCLUDED SEVERAL TECHNICAL DOCUMENTS THAT DESCRIBE HOW YOU CAN ALLOW POP-UP BLOCKERS BASED ON THE BROWSER YOU ARE USING. WE HAVE DOCUMENTS FOR CHROME, FIREFOX, MICROSOFT EDGE, AND SAFARI, IF YOU'RE USING A MAC. YOU CAN ACCESS THEM BY CLICKING ON THE MATERIALS DROP DOWN ARROW ON THE LEFT SIDE OF YOUR SCREEN. SO HOW ABOUT WE DO THIS? WE'RE GOING TO TAKE A LITTLE BIT OF TIME AND TEST THE POLLING FEATURE. SO HERE'S YOUR OPPORTUNITY TO ENSURE YOUR POP-UP BLOCKER IS NOT A ONE. SO YOU CAN RECEIVE THE POLLING QUESTIONS THROUGHOUT THE PRESENTATION. NOW HERE'S THE QUESTION. HOW MANY TIMES HAVE YOU ATTENDED AN IRS NATIONAL WEBINAR? A, THIS IS YOUR FIRST TIME; B, ONE TO FIVE TIMES; C, SIX TO 10 TIMES; D, 11 TO 15 TIMES; OR E, 16 OR MORE TIMES. SO TAKE A MOMENT AND CLICK ON THE RADIO BUTTON THAT CORRESPONDS TO YOUR ANSWER. HOW MANY TIMES HAVE YOU ATTENDED AN IRS NATIONAL WEBINAR? IS THIS YOUR FIRST TIME?

HAVE YOU BEEN WITH US ONE TO FIVE TIMES, SIX TO 10 TIMES, 11 TO 15 TIMES, OR 16 OR MORE TIMES? SO I'LL GIVE YOU A FEW MORE SECONDS TO MAKE YOUR SELECTIONS. OKAY, WE'RE GOING TO STOP THE POLLING NOW AND LET'S SEE HOW OFTEN YOU'VE ATTENDED A NATIONAL WEBINAR. SO GIVE ME A FEW SECONDS. LET'S SEE HERE. OKAY, SO FIRST TIME ATTENDEES, 14%. WELCOME, WE ARE GLAD YOU'RE JOINING US TODAY. FOR THOSE OF YOU WHO HAVE JOINED US FOR MULTIPLE WEBINARS, WELCOME BACK. SO LET'S SEE. I SEE THAT 25% OF YOU HAVE ATTENDED ONE TO FIVE WEBINARS, 16% OF YOU HAVE ATTENDED SIX TO 10 WEBINARS, 11% OF YOU HAVE ATTENDED 11 TO 15 WEBINARS. AND WOW, 34% OF YOU HAVE ATTENDED 16 OR MORE WEBINARS. NOW WE HOPE YOU HAVE RECEIVED THE POLLING QUESTION AND WE'RE ABLE TO SUBMIT YOUR ANSWER. IF NOT, NOW IS THE TIME TO CHECK YOUR POP-UP BLOCKER AND MAKE SURE THAT YOU HAVE IT TURNED OFF. SO AGAIN, WELCOME AND THANK YOU FOR JOINING US FOR TODAY'S WEBINAR. BEFORE WE MOVE ALONG WITH OUR SESSION, LET ME JUST MAKE SURE YOU'RE IN THE RIGHT PLACE. TODAY'S WEBINAR LOOKING TO TAX YEAR 2022: AMERICAN RESCUE PLAN TAX CHANGES TO EARNED INCOME TAX CREDIT AND OTHER CHILD-RELATED CREDITS. NOW THIS WEBINAR IS SCHEDULED FOR APPROXIMATELY 75 MINUTES, AND WITH THAT LET ME INTRODUCE TODAY'S SPEAKERS. IRIS PUGH STARTED HER CAREER WITH THE INTERNAL REVENUE SERVICE IN SEPTEMBER OF 2019 BY WAY OF THE HUMAN CAPITAL OFFICE. MAJORITY OF HER TIME WITH IRS WAS SPENT AS A HUMAN RESOURCE SPECIALIST. CURRENTLY, IRIS SERVES AS A SENIOR PROGRAM ANALYST FOR THE WAGE AND INVESTMENT STAKEHOLDER ENGAGEMENT TEAM. IRIS IS RESPONSIBLE FOR COORDINATING BOTH INTERNAL AND EXTERNAL STAKEHOLDERS REGARDING REFUNDABLE CREDITS AND OTHER TAX BENEFITS. AND OUR OTHER SPEAKER IS GOING TO BE COURTNEY KING. COURTNEY BEGAN HIS IRS CAREER OVER 20 YEARS AGO AND IS CURRENTLY A SENIOR PROGRAM ANALYST IN THE REFUNDABLE CREDITS ADMINISTRATION. HE HAS MORE THAN 10 YEARS' EXPERIENCE INTERVIEWING AND EDUCATING PAID TAX RETURN PREPARERS THROUGH CONDUCTING EXAMINATIONS AND PARTICIPATING IN THE ANNUAL IRS NATIONWIDE TAX FORUM. HE IS AN EXPERT IN THE DUE DILIGENCE REQUIREMENTS FOR THE EITC, THE CTC, THE AOTC AND HEAD OF HOUSEHOLD FILING STATUS. NOW I'M GOING TO TURN IT OVER TO IRIS TO BEGIN THIS PRESENTATION, IRIS. IRIS PUGH: GOOD AFTERNOON AND THANK YOU FOR JOINING US TODAY AS WE DISCUSS WHAT YOU AS A TAX PROFESSIONAL CAN EXPECT AS WE LOOK TO TAX YEAR 2022. AS YVETTE SAID, MY NAME IS IRIS PUGH. I'M JOINED TODAY BY ANOTHER SENIOR PROGRAM ANALYST, MY COLLEAGUE COURTNEY KING. OUR GOAL TODAY IS TO PROVIDE YOU WITH THE KNOWLEDGE AND RESOURCES YOU NEED TO UNDERSTAND THE ELIGIBILITY RULES PER EARNED INCOME TAX CREDIT, EITC, CHILD TAX CREDIT, CTC, ADDITIONAL CHILD TAX CREDIT, ACTC, OTHER DEPENDENT CREDITS, ODC, AMERICAN OPPORTUNITY TAX CREDIT, AOTC, AND THE HEAD OF HOUSEHOLD FILING STATUS. WE WILL ALSO OUTLINE DUE DILIGENCE RESPONSIBILITIES. WE WILL EXPLAIN HOW TO AVOID COMMON ERRORS WHEN CLAIMING THE APPLICABLE TAX BENEFITS AND ADDRESS SOME OF THE QUESTIONS MOST FREQUENTLY ASKED BY TAX PROFESSIONALS. WE WILL ALSO SHARE IRS REFUNDABLE CREDITS, ONLINE RESOURCES FOR TAX PROFESSIONALS. BUT BEFORE WE LOOK TO TAX YEAR 2022, LET'S QUICKLY REVISIT WHAT HAPPENED IN 2021. THE AMERICAN RESCUE PLAN ACT OF 2021 OR ARP WAS ENACTED ON MARCH 11, 2021. ARP MADE MAJOR CHANGES TO REFUNDABLE CREDIT. SOME PROVISIONS OF THE ACT APPLIED ONLY TO TAX YEAR 2021. WE WILL DISCUSS EACH CREDIT STARTING WITH EITC. HERE AS YOU ALL RECALL, ARE THE TEMPORARY PROVISIONS UNDER ARP FOR 2021. WE WANT TO MAKE SURE WE GIVE YOU ALL THE RELEVANT INFORMATION REGARDING THE PERMANENT PROVISIONS FOR TAX YEAR 2022 GOING FORWARD. SO LET'S CONTINUE WITH THOSE PROVISIONS NOW. FOR MORE INFORMATION, PLEASE VISIT WWW.EITC.IRS.GOV AS WELL AS EITC FREQUENTLY ASKED QUESTIONS, FAQ AT IRS.GOV. LET'S TALK ABOUT THE PERMANENT CHANGES TO EITC, BEGINNING 2022 MORE WORKERS AND WORKING FAMILIES WHO HAVE INVESTMENT INCOME QUALIFIED TO CLAIM EITC. THE MAXIMUM AMOUNT OF INVESTMENT INCOME THEY CAN RECEIVE AND STILL BE ELIGIBLE FOR EITC INCREASED FROM 2000 FROM THE 2020 LIMITATION OF $3,650 TO $10,300.

INVESTMENT INCOME LIMITATIONS ARE ADJUSTED FOR INFLATION ANNUALLY. REFER TO THE TABLES IN EITC CENTRAL AT WWW.EITC.IRS.GOV FOR MORE INFORMATION. ALSO, IF YOUR CLIENT HAS A CHILD WHO MEETS THE CONDITIONS TO BE A QUALIFYING CHILD FOR PURPOSES OF CLAIMING EITC, BUT THAT CHILD DOES NOT HAVE A VALID SOCIAL SECURITY NUMBER, YOUR CLIENT CAN CLAIM THE SELF ONLY EITC IF THEY'RE ELIGIBLE. THE FINAL PERMANENT PROVISION IS MARRIED BUT SEPARATE SPOUSES WHO DO NOT FILE A JOINT RETURN MAY QUALIFY FOR EITC. LET'S LOOK AT THE PROVISIONS THAT APPLY TO TAXPAYERS WHO FILE MARRIED FILING SEPARATELY. CLIENTS WHO CLAIM MARRIED FILING SEPARATELY MAY NOW QUALIFY TO CLAIM EITC IF THEY MEET CERTAIN REQUIREMENTS. YOUR CLIENTS CAN CLAIM EITC, YOUR CLIENTS CAN CLAIM EITC IF THEY'RE MARRIED, NOT FILING A JOINT RETURN, HAD A QUALIFYING CHILD WHO LIVED FOR THEM, WHO LIVED WITH THEM FOR MORE THAN HALF OF THE TAX YEAR AND EITHER OF THE FOLLOWING APPLIES, LIVED APART FROM THEIR SPOUSE FOR THE LAST SIX MONTHS OF THE TAX YEAR FOR WHICH EITC IS BEING CLAIMED FOR OR ARE LEGALLY SEPARATED ACCORDING TO THEIR STATE LAW UNDER A WRITTEN SEPARATION AGREEMENT AND DECREE OF SEPARATE MAINTENANCE AND DO NOT LIVE IN THE SAME HOUSEHOLD AS THEIR SPOUSE AT THE END OF THE TAX YEAR FOR WHICH EITC IS BEING CLAIMED. NOW THAT WE'RE FAMILIAR WITH THE ARP CHANGES FOR EITC, LET'S REVIEW BASIC EITC ELIGIBILITY RULES. TABLE 1 OF THE PUBLICATIONS 596 TITLED EARNED INCOME CREDIT PROVIDES 8 EITC RULES. THERE ARE EIGHT RULES THAT APPLY TO EVERYONE, FIRST IS ON THE CURRENT SLIDE. YOU MUST BE SURE THAT YOUR CLIENTS HAVE A VALID SOCIAL SECURITY NUMBER, ARE U.S. CITIZENS OR RESIDENT ALIENS ALL YEAR, MEET CERTAIN, SORRY, MEET CERTAIN RULES IF THEY'RE SEPARATED FROM THEIR SPOUSES, DO NOT FILE A JOINT RETURN IF SEPARATED FROM THEIR SPOUSE. THESE ARE FOUR THESE ARE THE FOUR FINAL RULES THAT APPLY TO EVERYONE WHO CLAIMS EITC. YOUR CLIENT MUST HAVE AN ADJUSTED GROWTH INCOME OR AGI THAT IS LESS THAN THE APPLICABLE LIMIT, CANNOT FILE FORM 2555 FOREIGN EARNED INCOME.

YOU CAN FIND MORE INFORMATION ABOUT THE FORM 2555 IN PUBLICATIONS 54 TITLED TAX GUIDE FOR U.S.

CITIZENS AND RESIDENT ALIENS ABROAD. MUST HAVE EARNED INCOME, MUST HAVE INVESTMENT INCOME LESS THAN $10,300. AND REMEMBER, THIS NUMBER WILL BE ADJUSTED FOR INFLATION EACH YEAR. WE FINISHED OUR DISCUSSION ABOUT THE ELIGIBILITY RULES THAT APPLY TO ALL TAXPAYERS. NOW LET'S DISCUSS THE EITC ELIGIBILITY RULES THAT APPLY TO TAXPAYERS WHO HAVE QUALIFYING CHILDREN. YOUR CLIENTS' QUALIFYING CHILDREN MUST MEET RELATIONSHIP, AGE, RESIDENCY, AND JOINT RETURN TESTS. A QUALIFYING CHILD CANNOT BE USED BY MORE THAN ONE PERSON TO CLAIM EITC. AS ALL OF YOU KNOW, BEING A QUALIFYING CHILD OF MORE THAN ONE PERSON IS NOT UNCOMMON FOR CHILDREN OF DIVORCED OR SEPARATED PARENTS OR FOR THOSE CHILDREN WHO MAY BE CARED FOR BY SOMEONE OTHER THAN THEIR PARENTS. WHEN THIS HAPPENS AND YOU KNOW IT WILL, THE TIE-BREAKER RULES MAY NEED TO BE APPLIED. WE WILL DISCUSS THE TIE-BREAKER RULES LATER IN THIS SESSION. IT IS IMPORTANT TO ALSO ENSURE THAT THE CLIENT IS NOT A QUALIFYING CHILD OF ANOTHER TAXPAYER. LET'S LOOK AT THE FOUR TESTS THAT MUST BE MET IN ORDER TO BE CONSIDERED A QUALIFYING CHILD. AT A GLANCE, YOU MAY THINK THESE FOUR TESTS WOULD BE EASY TO DISCUSS AND DETERMINE WHETHER A CHILD MEETS THEM. IF YOU ARE AN EXPERIENCED TAX PROFESSIONAL, YOU MAY HAVE TONS OF SCENARIOS THAT WOULD PROVE JUST HOW DIFFICULT THIS OF A TASK THIS REALLY IS. THE PUBLICATION 4687, PAID PREPARER DUE DILIGENCE IS MORE THAN A CHECK MARK ON THE FORM. IT PROVIDES GREAT SCENARIOS TO ASSIST WHEN ADDRESSING THESE SITUATIONS. FOR TAX 2022, TAXPAYERS WITH NO QUALIFYING CHILD MUST MEET THE FOLLOWING RULES: BE AT LEAST AGE 25 BUT UNDER AGE 65, EITHER SPOUSE CAN MEET THIS CRITERION IF FILING A JOINT RETURN, BE IN THE U.S. FOR MORE THAN ONE HALF OF THE TAX YEAR.

THIS RULE APPLIES TO BOTH SPOUSES IF MARRIED FOLLOWING JOINTLY, NOT BE A DEPENDENT OF ANOTHER PERSON OR A EITC QUALIFYING CHILD OF ANOTHER PERSON. THAT WRAPS UP THE RULES FOR CLIENTS WITHOUT A QUALIFYING CHILD. NOW LET'S DISCUSS SOME COMMON ERRORS THAT ARE MADE WHEN CLAIMING EITC. THE FIRST ERROR WE WILL DISCUSS INVOLVES TAXPAYERS WHO CLAIM EITC FOR A CHILD WHO DOES NOT MEET THE QUALIFYING REQUIREMENTS. TO AVOID THIS ERROR, FIND OUT WHETHER THE CHILD MEETS THE RESIDENCY, RELATIONSHIP, AGE AND JOINT RETURN TESTS. DON'T FORGET THAT THE CHILD MUST HAVE A VALID SOCIAL SECURITY NUMBER FOR EMPLOYMENT ISSUED ON OR BEFORE THE DUE DATE OF THE RETURN. THE NEXT ERROR LISTED INVOLVES USING AN INCORRECT FILING STATUS AND THIS ERROR OCCURS WHEN A TAXPAYER FILES AS SINGLE OR HEAD OF HOUSEHOLD WHEN THEY ARE MARRIED. TO PREVENT THIS ERROR, ASK QUESTIONS TO FIND OUT IF THE CLIENT IS OR IS PREVIOUSLY MARRIED. IF YOUR CLIENT IS MARRIED BUT SEPARATED, MAKE SURE YOUR CLIENT DID NOT LIVE IN HIS OR HER SPOUSE AT ANY TIME DURING THE LAST SIX MONTHS OF THE YEAR.

THE FINAL ERROR LISTED HERE INVOLVES REPORTING OF INCOME. IT IS IMPORTANT TO ENSURE THAT THE CLIENTS' INCOME AND EXPENSES ARE CORRECTLY REPORTED ON THEIR TAX RETURN. YOUR CLIENT SHOULD PROVIDE YOU WITH ALL OF THEIR SOURCES OF INCOME. SUCH FORMS ARE W2, W2G, 1099 MISCELLANEOUS AND 1099 NON-EMPLOYEE COMPENSATION AND ALL OTHER RECORDS OF THEIR INCOME. IF NOT SURE, YOUR CLIENT CAN PROVIDE PERIODIC PAY STATEMENTS, CHECK STUBS OR A LETTER FROM THEIR EMPLOYER ON A COMPANY LETTERHEAD. BE ALERT FOR QUESTIONABLE FORMS W2 OR FORMS 1099. ALSO BE ALERT IF YOUR CLIENT SAYS THEY OWN A BUSINESS OR ARE ENGAGED IN A GIG ECONOMY BUT ARE NOT CLAIMING ANY BUSINESS EXPENSES. IF SO, ASK ENOUGH QUESTIONS TO MAKE SURE YOUR CLIENT HAS A TRUE BUSINESS, CLAIMS ALL BUSINESS INCOME AND DEDUCTS ALL ALLOWABLE EXPENSES. NOW LET'S CHECK YOUR UNDERSTANDING WITH OUR FIRST POLL QUESTION. YVETTE, CAN YOU HELP US WITH THAT? YVETTE BROOKS-WILLIAMS: I CERTAINLY CAN, IRIS. IRIS, WHEN YOU'RE SPEAKING, IF YOU COULD SPEAK JUST A LITTLE BIT LOUDER, WE'RE GETTING SOME COMMENTS THAT, YOUR VOICE IS A LITTLE BIT LOW. IRIS PUGH: SURE THING. YVETTE BROOKS-WILLIAMS: ALL RIGHT.

THANK YOU. SO AUDIENCE, AS IRIS HAS SAID, IT IS TIME FOR OUR FIRST POLLING QUESTION. AUDIENCE, TAKE A MOMENT AND ANSWER THE FOLLOWING QUESTION. WHICH OF THE FOLLOWING IS NOT ONE OF THE FOUR TESTS THAT MUST BE MET IN ORDER FOR A CHILD TO BE CONSIDERED A QUALIFYING CHILD? NOW IS THE CORRECT ANSWER: A, RELATIONSHIP; B, PASSPORT; C, AGE; D, RESIDENCY; OR E, JOINT RETURN. CLICK THE RADIO BUTTON THAT BEST ANSWERS THE QUESTION. WHICH OF THE FOLLOWING IS NOT ONE OF THE FOUR TESTS THAT MUST BE MET IN ORDER FOR A CHILD TO BE CONSIDERED A QUALIFYING CHILD? SO I'M GOING TO GIVE YOU A FEW MORE SECONDS TO MAKE YOUR SELECTION. OKAY, WE'RE GOING TO STOP THE POLLING NOW AND LET'S SHARE THE CORRECT ANSWER ON THE NEXT SLIDE. AND THE CORRECT RESPONSE IS B, PASSPORT TEST. THE PASSPORT TEST IS NOT ONE OF THE FOUR TESTS THAT MUST BE MET IN ORDER FOR A CHILD TO BE CONSIDERED A QUALIFYING CHILD. NOW LET'S SEE HOW WELL YOU ALL DID WITH THIS QUESTION. I SEE THAT 94% OF YOU RESPONDED CORRECTLY. THAT IS A GREAT RESPONSE RATE. IRIS, I'M GOING TO TURN IT BACK OVER TO YOU.

IRIS PUGH: THANK YOU, YVETTE. EACH YEAR WE GET VARIOUS QUESTIONS FROM YOUR FELLOW TAXPAYERS.

TODAY WE WILL SHARE A FEW OF THOSE QUESTIONS AND THE ANSWERS WE PROVIDED. LET'S TAKE A LOOK AT OUR FIRST QUESTION. OUR FIRST QUESTION STATES, WHAT IF A CLIENT, WHAT IF MY CLIENT HAS THE SAME QUALIFYING CHILD AS SOMEONE ELSE? THE ANSWER CAN BE FOUND IN PUBLICATION 596 TITLED EARNED INCOME CREDIT. THE PUBLICATION 596 HAS SEVERAL EXAMPLES OF SITUATIONS WHERE A CHILD IS IN FACT THE QUALIFYING CHILD OF MORE THAN ONE PERSON. I RECOMMEND THAT YOU USE THOSE EXAMPLES TO ASSIST YOU WHEN DEALING WITH THESE SITUATIONS. BUT KEEP IN MIND THAT IF EVERYONE CANNOT AGREE AND MORE THAN ONE PERSON WOULD LIKE TO USE THE SAME CHILD, THE TIE-BREAKER RULES WILL APPLY. SO LET'S LOOK AT TIE-BREAKER RULES NOW. THE TIE-BREAKER RULES SHOWN IN THIS SLIDE EXPLAIN WHO IF ANYONE CAN CLAIM EITC WHEN MORE THAN ONE PERSON HAS THE SAME QUALIFYING CHILD. HOWEVER, THE TIE-BREAKER RULES DON'T APPLY IF THE OTHER PERSON IS YOUR SPOUSE AND YOU FILE A JOINT RETURN. TO DETERMINE WHICH PERSON CAN TREAT THE CHILD AS A QUALIFYING CHILD TO CLAIM TAX BENEFITS THE FOLLOWING TIE-BREAKER RULES APPLY. FIRST IF ONLY ONE PERSON IS THE PARENT IS THE CHILD'S PARENT, THIS CHILD IS TREATED AS A QUALIFYING CHILD OF THAT PARENT. IF THE PARENTS FILE A JOINT RETURN TOGETHER AND CAN CLAIM THE CHILD AS A QUALIFYING CHILD, THE CHILD IS STILL TREATED AS THE QUALIFYING CHILD OF THE TWO PARENTS. HOWEVER, IF THE PARENTS DON'T FILE A JOINT RETURN TOGETHER, BUT BOTH PARENTS WOULD LIKE TO CLAIM THE CHILD AS A QUALIFYING CHILD, THE IRS WILL TREAT THE CHILD AS A QUALIFYING CHILD OF THE PARENT WITH WHOM THE CHILD LIVED WITH FOR THE LONGER PERIOD DURING THE YEAR. IF THE CHILD LIVED WITH EACH PARENT FOR THE SAME AMOUNT OF TIME, THE IRS WOULD TREAT THE CHILD AS THE QUALIFYING CHILD OF THE PARENT WHO HAD THE HIGHEST ADJUSTED GROSS INCOME OR AGI FOR THE YEAR. IN SITUATIONS WHERE NEITHER PARENT CAN CLAIM THE CHILD AS A QUALIFYING CHILD, THE CHILD IS TREATED AS THE QUALIFYING CHILD OF THE PERSON WHO HAD THE HIGHEST AGI FOR THE YEAR. IF A PARENT CAN CLAIM THE CHILD AS A QUALIFYING CHILD, BUT NEITHER PARENT CHOOSES TO DO SO, THE CHILD IS TREATED AS THE QUALIFYING CHILD OF THE CHILD WHO HAD THE HIGHEST AGI FOR THE YEAR. BUT ONLY IF THAT PERSON'S AGI IS HIGHER THAN THE HIGHEST AGI OF ANY OF THE CHILD'S PARENTS WHO CAN CLAIM THE CHILD. I KNOW THAT'S A LOT, BUT REMEMBER, PUBLICATION 596 CAN BE A GREAT RESOURCE FOR YOU. LET'S MOVE ON TO OUR SECOND EITC FREQUENTLY ASKED QUESTION. THE QUESTION STATES, CAN YOU CLARIFY HOW THIS, TREATED AS UNMARRIED, DEFINITION CHANGES ELIGIBILITY FOR EITC? PRIOR TO 2021, MARRIED TAXPAYERS HAD TO FILE JOINTLY WITH THEIR SPOUSE TO CLAIM EITC. BEGINNING IN 2021 PRE ARP, TAXPAYERS WHO DO NOT FILE A JOINT RETURN MAY QUALIFY TO BE TREATED AS NOT MARRIED FOR EITC PURPOSES. TO QUALIFY, TAXPAYERS WHO ARE MARRIED FILING SEPARATELY AND CLAIMING EITC MUST HAVE A QUALIFYING CHILD LIVING WITH THEM FOR MORE THAN HALF OF THE YEAR AND BE SEPARATED FROM THEIR SPOUSE IN ONE OF THE WAYS DISCUSSED EARLIER. MARRIED TAXPAYERS WHO MEET THE REQUIREMENTS TO CLAIM EITC ON A SEPARATE RETURN SHOULD CHECK THE APPROPRIATE BOX AT THE TOP OF SCHEDULE EIC AND SEND IT IN ELECTRONICALLY OR ATTACH IT TO THEIR PAPER FORM 1040 OR FORM 1040-SR. LET'S LOOK AT ONE LAST EITC FREQUENTLY ASKED QUESTION BEFORE WE MOVE ON. THIS QUESTION STATES, CAN YOU CLARIFY WHO QUALIFIES FOR EITC AT AGE 19 AND 24?

THE AGE LIMITATIONS FOR TAXES 2022 AND BEYOND REVERT TO THE PRE-ARP AGE LIMITS. THIS MEANS TAXPAYERS MUST BE AT LEAST AGE 25, BUT UNDER THE AGE OF 65. AS YOU CAN SEE, EITC HAS A LOT OF COMPLEX RULES. HOWEVER, WE HAVE LOTS OF FREE ONLINE RESOURCES AVAILABLE FOR YOU TO GET INFORMATION. LET'S TAKE A LOOK AT A FEW OF THEM NOW. OUR TAX RETURN PREPARER TOOLKIT ON EITC.IRS.GOV IS LOADED WITH DUE DILIGENCE RESOURCES. I STRONGLY RECOMMEND THAT YOU MAKE THIS ONE OF YOUR FAVORITES ON YOUR COMPUTER. THERE IS A SECTION DEDICATED SOLELY TO HOT TOPICS FOR RETURN PREPARERS. OR YOU CAN TEST YOUR KNOWLEDGE ONLINE WITH THE IRS'S DUE DILIGENCE TRAINING MODULE. THE TRAINING MODULE IS AVAILABLE IN BOTH ENGLISH AND SPANISH AND CAN BE COMPLETED AT ANY TIME FOR FREE, AND YOU CAN EARN ONE CONTINUING PROFESSIONAL EDUCATION CREDIT. THE TOOLS AND TIPS TAB IS ALSO LOADED WITH TONS OF HELPFUL INFORMATION. WHEN YOU CLICK ON THE LINK, YOU WILL FIND INFORMATION REQUESTED BY THE IRS DURING AUDITS AND RECOMMENDED DOCUMENTS THAT A TAXPAYER CAN PROVIDE TO CONFIRM THEIR ELIGIBILITY FOR CREDITS CLAIMED ON THEIR RETURN. THE TAXPAYER THE TAX RETURN PREPARER TOOLKIT INCLUDES A LINK TO THE FORM 886-H-EIC TOOLKIT, WHICH INCLUDES SCHOOL, HEALTHCARE AND CHILDCARE TEMPLATES. THESE TEMPLATES CAN BE USED DURING YOUR DISCUSSION WITH YOUR CLIENTS TO PERFORM DUE DILIGENCE FOR CLIENTS CLAIMING EITC. LET'S TAKE A LOOK AT SOME OF THOSE TEMPLATES NOW.

DURING THE AUDIT PROCESS, THE SCHOOL TEMPLATE SHOWN ON THIS SLIDE CAN BE USED BY SCHOOLS. YOUR CLIENT CAN ASK THE SCHOOL TO USE THIS TEMPLATE ON THE SCHOOL'S LETTERHEAD AND INPUT THE NEEDED INFORMATION TO REPLACE THE GUIDELINES IN THE BRACKETS. DURING THE AUDIT PROCESS, THE HEALTHCARE PROVIDER TEMPLATES CAN BE USED BY YOUR CLIENTS' HEALTHCARE PROVIDER'S OFFICE. THE CHILDCARE PROVIDER TEMPLATE CAN BE USED BY YOUR CLIENTS' CHILDCARE PROVIDER. THE CHILDCARE PROVIDER TEMPLATE LIKE THE OTHER TWO, IS A RESOURCE THAT CAN BE USED DURING THE AUDIT PROCESS. LET'S CHECK IN AGAIN AND SEE IF YOU ARE ALL GETTING THE HANG OF THIS NOW. YVETTE, ARE YOU READY FOR ANOTHER POLL QUESTION? YVETTE BROOKS-WILLIAMS: I AM. AUDIENCE I HOPE YOU'RE READY TOO. NOW FOR OUR SECOND POLLING QUESTION, THIS IS A FILL IN THE BLANK. IT'S A LITTLE BIT LONG, SO I'M GOING TO NEED YOU TO LISTEN CAREFULLY. FILL IN THE BLANK WITH THE TEST OR RULES THAT BEST SUPPORTS THE FOLLOWING SET.

UNDER BLANK A CHILD IS TREATED AS A QUALIFYING CHILD ONLY BY: THE PARENTS IF THEY FILE A JOINT RETURN. THE PARENT, IF ONLY ONE OF THE PERSONS IS THE CHILD'S PARENT. THE PARENT WITH WHOM THE CHILD LIVED THE LONGEST DURING THE TAX YEAR, IF TWO OF THE PERSONS ARE THE CHILD'S PARENTS AND THEY DO NOT FILE A JOINT RETURN TOGETHER, THE PARENT WITH THE HIGHEST ADJUSTED GROSS INCOME ALSO KNOWN AS AGI, IF THE CHILD LIVED WITH EACH PARENT FOR THE SAME AMOUNT OF TIME DURING THE TAX YEARS, AND THEY DO NOT FILE A JOINT RETURN TOGETHER. THE PERSON WITH THE HIGHEST AGI, IF NO PARENT CAN CLAIM THE CHILD AS A QUALIFYING CHILD OR A PERSON WITH THE HIGHER AGI THAN ANY PARENT WHO CAN CLAIM THE CHILD AS A QUALIFYING CHILD BUT DOES NOT. NOW DO THESE FACTS BEST SUPPORT A, THE RELATIONSHIP TEST; B, THE RESIDENCY TEST; C, THE TIE-BREAKER RULE OR D, THE PARENTING RULE. SO TAKE A MOMENT AND CLICK THE RADIO BUTTON THAT BEST ANSWERS THE QUESTION UNDER BLANK A CHILD IS TREATED AS A QUALIFYING CHILD BY? SO IS IT THE A, THE RELATIONSHIP TEST; B, THE RESIDENCY TEST; C, THE TIE-BREAKER RULE OR D, THE PARENTING RULE. SO TAKE A MOMENT AND CLICK ON THAT RADIO BUTTON AND I'LL GIVE YOU JUST A FEW MORE SECONDS TO MAKE YOUR SELECTION. OKAY, SO WE'RE GOING TO STOP THE POLLING NOW AND LET'S SHARE THE CORRECT ANSWER ON THE NEXT SLIDE. AND LET'S SEE, THE CORRECT ANSWER IS C, THE TIE-BREAKER RULE. SO LET'S SEE HOW WELL YOU ALL DID WITH THIS QUESTION. OKAY, I SEE THE 84% OF YOU RESPONDED CORRECTLY. THAT'S A GOOD RESPONSE RATE. AND I THINK, LET'S SEE, COURTNEY, IT LOOKS LIKE YOU'RE GOING TO DISCUSS THE CHILD TAX CREDIT. COURTNEY KING: THAT WOULD BE CORRECT, MY FAVORITE SUBJECT AND FOR MANY OF THE PARTICIPANTS TODAY. SO THANK YOU, YVETTE. LET'S START TALKING ABOUT THE CHILD TAX CREDIT. AS WE ALL RECALL, THERE WERE SEVERAL TEMPORARY PROVISIONS RELATED TO THE CHILD TAX CREDIT FOR TAX YEAR 2021, TAX YEAR 2021 RETURNS. AND SO JUST AS WE SAID WITH THE EITC, WE WANT TO MAKE SURE THAT WE EQUIP YOU ALL TODAY WITH RELEVANT AND PERTINENT INFORMATION FOR THE CURRENT RETURNS THAT YOU'RE GOING TO BE PREPARING. AND SO WE'RE GOING FOCUS ON TAX YEAR 2022. SO FOR TAX YEAR 2022 AND GOING FORWARD THROUGH TAX YEAR 2025, THE CHILD TAX CREDIT IS $2,000 PER QUALIFYING CHILD AND UP TO $1,400 OF THAT IS GOING TO BE REFUNDABLE. THE QUALIFYING CHILD MUST HAVE AN SSN ISSUED BEFORE THE DUE DATE OF THE RETURN AND OF COURSE THAT DOES INCLUDE EXTENSIONS. THE TAXPAYER AND THEIR SPOUSE IF THEY'RE GOING TO FILE A JOINT RETURN, MUST BOTH HAVE VALID TAXPAYER IDENTIFICATION NUMBERS THAT WERE ISSUED ON OR BEFORE THE DUE DATE OF THE RETURN. AND AGAIN, THAT DOES INCLUDE EXTENSIONS AS WELL. THE TOTAL OF THE CHILD TAX CREDIT AND THE CREDIT FOR OTHER DEPENDENTS THAT IS ACTUALLY PHASED OUT BY $50 FOR EACH $1,000 OR FRACTION THEREOF OF THE MODIFIED ADJUSTED GROSS INCOME THAT EXCEEDS $400,000 IN THE CASE OF A JOINT RETURN. AND THAT IS $200,000 FOR ALL OTHER FILING STATUSES. THE SCHEDULE 8812, THAT WILL STILL BE REQUIRED GOING FORWARD WHEN THE CREDIT IS CALCULATED AND THE CHILD MUST BE UNDER 17-YEARS-OLD AT THE END OF THE YEAR. AND ADDITIONALLY, TO QUALIFY FOR THE CREDIT THAT QUALIFYING CHILD MUST FIRST BE CLAIMED AS A DEPENDENT ON THE RETURN, THEY MUST ALSO BE THE TAXPAYER'S SON, DAUGHTER, STEPCHILD, ELIGIBLE FOSTER CHILD, BROTHER, SISTER, STEPBROTHER, STEPSISTER, OR A DESCENDANT OF ANY OF THEM, THE CHILD MUST ALSO NOT HAVE PROVIDED MORE THAN HALF OF HIS OR HER OWN SUPPORT FOR THE TAX YEAR, GENERALLY THEY MUST HAVE LIVED WITH THE TAXPAYER FOR MORE THAN HALF OF THE YEAR AND THEY MUST HAVE BEEN A U.S. CITIZEN, U.S. NATIONAL, OR A U.S. RESIDENT OF THE UNITED STATES. AND THERE ARE SOME SPECIAL RULES FOR DISABLED INDIVIDUALS. AND SO FOR MORE INFORMATION REGARDING THOSE CHILD-BASED TAX BENEFITS FOR INDIVIDUALS WHO ARE DISABLED, WE ASK THAT YOU ALL TAKE A LOOK AT PUBLICATION 3966, WHICH IS TITLED TAX BENEFITS AND CREDITS: LIVING AND WORKING WITH DISABILITIES. SO NOW LET'S TAKE A FEW MOMENTS TO DISCUSS SOME OF THE COMMON ERRORS THAT WE SEE WHEN CLAIMING THE CHILD TAX CREDIT. FIRSTLY, ONE OF THE MOST COMMON ERRORS INVOLVES CLAIMING THE CHILD TAX CREDIT OR ADDITIONAL CHILD TAX CREDIT FOR A CHILD THAT DOES NOT MEET THE AGE REQUIREMENTS. AS WE JUST SAID A SECOND AGO, THE CHILD MUST BE UNDER THE AGE OF 17 AT THE END OF THE TAX YEAR AND THERE ARE NO EXCEPTIONS FOR TAX YEARS 2022 AND GOING FORWARD. THE SECOND MOST COMMON ERROR THAT WE SEE WHEN A PERSON IS CLAIMING THE CHILD TAX CREDIT OR ADDITIONAL CHILD TAX CREDIT, IT'S FOR A CHILD THAT DOES NOT HAVE A VALID SOCIAL SECURITY NUMBER AND A VALID SOCIAL SECURITY NUMBER IS ONE THAT IS VALID FOR EMPLOYMENT AND IT HAS TO BE ISSUED BEFORE THE DUE DATE OF THE TAX RETURN INCLUDING EXTENSIONS. AND THE ONLY EXCEPTION FOR THIS RULE IS A DEPENDENT CHILD WHO WAS BORN AND DIED BEFORE THE END OF THE YEAR. SO YOU MAY BE ASKING YOURSELF, HOW DO I AVOID THESE MISTAKES OR HOW DO I EDUCATE MYSELF AND MY CLIENTS WITH RESPECT TO THESE ISSUES? AND I'M GLAD THAT YOU ASKED THAT QUESTION, BECAUSE IF YOU HAVE ANY REASON TO DOUBT OR TO QUESTION THE CORRECTNESS, THE CONSISTENCY OR THE COMPLETENESS OF ANY OF THE INFORMATION THAT YOUR CLIENT PROVIDES AND THAT YOU USE TO DETERMINE THEIR ELIGIBILITY FOR THE CREDIT, THERE ARE A FEW THINGS THAT YOU HAVE TO DO.

YOU HAVE TO FIRST ASK ADDITIONAL QUESTIONS OF YOUR CLIENT TO GET TO THE PERTINENT INFORMATION.

DOCUMENT, DOCUMENT, DOCUMENT IN YOUR FILES AT THE TIME OF THE INTERVIEW, THE QUESTIONS THAT YOU ASKED AND YOUR CLIENT'S ANSWERS. KEEP COPIES OF ANY TAXPAYER DOCUMENTS THAT YOU RELIED ON TO DETERMINE THEIR ELIGIBILITY FOR THE CREDIT. THOSE ARE THREE VERY IMPORTANT THINGS. SO WHAT HAPPENS IF YOUR CLIENT CAN'T CLAIM THE CHILD TAX CREDIT FOR A DEPENDENT? WHAT OTHER OPTIONS OR TAX BENEFITS ARE AVAILABLE TO THEM? WELL, THE GREAT THING ABOUT THE CREDIT FOR OTHER DEPENDENTS IS THAT IT IS FOR DEPENDENTS WHO CANNOT QUALIFY TO BE CLAIMED FOR THE CHILD TAX CREDIT. AND WE'RE GOING TO DIVE INTO AND DISCUSS THE ELIGIBILITY RULES FOR THE CREDIT FOR OTHER DEPENDENTS IN JUST A SECOND. BUT YVETTE, I THINK THAT NOW WOULD BE A GOOD TIME FOR ANOTHER POLLING QUESTION. WHAT DO YOU THINK? YVETTE BROOKS-WILLIAMS: I THINK THAT IS A GREAT IDEA, COURTNEY. SO AUDIENCE, LET'S TAKE A LOOK AT OUR THIRD POLLING QUESTION. WHICH SCHEDULE IS REQUIRED TO CALCULATE THE CHILD TAX CREDIT? IS THE CORRECT ANSWER A, SCHEDULE EIC; B, SCHEDULE 8862; C, SCHEDULE C; OR D, SCHEDULE 8812. NOW TAKE A MOMENT AND CLICK THE RADIO BUTTON THAT BEST ANSWERS THE QUESTION, WHICH SCHEDULE IS REQUIRED TO CALCULATE THE CHILD TAX CREDIT? AND I'LL GIVE YOU A FEW MORE SECONDS TO MAKE YOUR SELECTION. OKAY, WE'RE GOING TO STOP THE POLLING NOW AND LET'S SHARE THE CORRECT ANSWER ON THE NEXT SLIDE. AND THE CORRECT ANSWER IS D, SCHEDULE 8812. NOW LET'S SEE HOW WELL YOU ALL DID WITH THIS QUESTION. I SEE THAT 85% OF YOU RESPONDED CORRECTLY. GREAT JOB EVERYONE. SO COURTNEY, LET ME SEE IF I'M GOING TO BE SENDING THIS BACK OVER TO YOU. SORRY, SOME THINGS IN MY WAY. OH YES, COURTNEY, I'M GOING TO SEND IT BACK OVER TO YOU OR NO, I'M SORRY. I'M GOING TO TURN IT BACK OVER TO IRIS NOW. MY APOLOGIES, IRIS. IRIS PUGH: THANK YOU, YVETTE. TAXPAYERS WITH DEPENDENTS WHO DON'T QUALIFY FOR THE CTC MAY BE ABLE TO CLAIM THE ODC. REMEMBER, THIS IS A NON-REFUNDABLE CREDIT. IT CAN REDUCE OR IN SOME CASES ELIMINATE A TAX BILL, BUT THE IRS CANNOT REFUND THE TAX PORTION OF THE CREDIT THAT MAY BE LEFT OVER. A TAXPAYER CAN CLAIM ODC IF THEY CLAIM THE PERSON AS A DEPENDENT, THEY CANNOT USE A DEPENDENT TO CLAIM THE CTC OR ADDITIONAL CTC. AND THE DEPENDENT IS A U.S.

CITIZEN, NATIONAL OR RESIDENT ALIEN. HERE WE HAVE SOME ADDITIONAL SCENARIOS UNDER WHICH A DEPENDENT MAY BE A QUALIFYING CHILD OR RELATIVE FOR PURPOSES OF THE ODC, THEY INCLUDE A QUALIFYING CHILD WHO'S OVER THE AGE OF 16, A RELATIVE OF THE TAXPAYER FOR WHOM THE TAXPAYER PROVIDES MORE THAN HALF OF THEIR SUPPORT FOR, OR AN UNRELATED DEPENDENT WHO LIVE WITH THE TAXPAYER FOR THE ENTIRE YEAR. ODC CAN BE CLAIMED FOR DEPENDENT OF ANY AGE, INCLUDING THOSE WHO ARE AGED 18 AND OLDER. DEPENDENTS WHO HAVE SOCIAL SECURITY NUMBER, THAT NUMBER IS VALID, I'M SORRY, NOT VALID FOR EMPLOYMENT, ADOPTION TAX IDENTIFICATION NUMBERS, ATIN OR INDIVIDUAL TAX IDENTIFICATION NUMBER, ITIN. DEPENDENT PARENTS OR OTHER QUALIFYING RELATIVES SUPPORTED BY THE TAXPAYER. AND AS MENTIONED ON THE PRIOR SLIDE, AN UNRELATED DEPENDENT WHO LIVES WITH THE TAXPAYER ALL YEAR AS A MEMBER OF THEIR HOUSEHOLD. THE KEY WORD HERE IS DEPENDENT. THE TAXPAYER MUST BE ABLE TO CLAIM THAT PERSON AS A DEPENDENT. THE WORD DEPENDENT MEANS THE PERSON'S INCOME MUST BE BELOW THE EXEMPTION AMOUNT, THE TAXPAYER PROVIDES OVER HALF OF THE PERSON'S FINANCIAL SUPPORT AND THE PERSON CANNOT FILE A JOINT RETURN UNLESS THAT JOINT RETURN IS FILED SOLELY TO CLAIM A REFUND OF WITHHELD INCOME TAX OR ESTIMATED TAX PAID. AND AS I JUST EXPLAINED, THE PERSON MUST BE A U.S. CITIZEN, RESIDENT ALIEN, OR A NATIONAL, AND YOU CANNOT USE THE PERSON TO CLAIM CTC. THE MAXIMUM CREDIT AMOUNT IS $500 FOR EACH DEPENDENT. THE CREDIT BEGINS TO PHASE OUT WHEN THE TAXPAYER'S INCOME IS MORE THAN $200,000. THIS PHASE OUT BEGINS FOR MARRIED COUPLES FILING A JOINT TAX RETURN AT $400,000. THERE ARE SPECIAL RULES THAT APPLY TO DISABLED INDIVIDUALS, FOR INFORMATION REGARDING CHILD BASED TAX BENEFITS FOR DISABLED INDIVIDUALS. AGAIN, PLEASE REFERENCE PUBLICATION 3966. AS WE PROMISE WE'RE GOING TO SHARE THE MOST COMMON ERRORS THAT ARE MADE WHEN CLAIMING ODC. LET'S DISCUSS THOSE NOW. THE FIRST ERROR SHOWN HERE INVOLVES CLAIMING THE ODC FOR AN INDIVIDUAL WHO DOES NOT HAVE A TAX IDENTIFICATION NUMBER, THE PERSON MUST HAVE SOME FORM OF IDENTIFICATION NUMBER. IT CAN BE AN INDIVIDUAL TAX IDENTIFICATION NUMBER, ITIN AN ADOPTION TAX IDENTIFICATION NUMBER, ATIN OR SOCIAL SECURITY NUMBER.

THE SOCIAL SECURITY NUMBER DOES NOT HAVE TO BE VALID FOR PURPOSES OF EMPLOYMENT. EITHER WAY, THE IDENTIFICATION NUMBER MUST BE ISSUED ON OR BEFORE THE DATE OF THE RETURN. THIS DOES INCLUDE EXTENSIONS. THE NEXT ERROR IS CLAIMING ODC FOR AN INDIVIDUAL WHO DOES NOT MEET THE DEPENDENCY REQUIREMENT, THE INDIVIDUAL MUST BE CLAIMED AS A DEPENDENT ON YOUR CLIENT'S RETURN AND MEET ALL ELIGIBILITY RULES FOR A DEPENDENT. THE FINAL MOST COMMON ERROR MADE INVOLVES CLAIMING ODC FOR A NON-CITIZEN WHO DOES NOT MEET THE RESIDENCY REQUIREMENTS, THE INDIVIDUAL CLAIMED MUST BE A U.S.

CITIZEN, A U.S. NATIONAL, A U.S. RESIDENT. NOW LET'S LOOK AT SOME VERY HELPFUL RESOURCES THAT CAN ASSIST YOU WHEN FILING A RETURN CLAIMING CTC AND ODC. WE HAVE A TAX PREPARED TOOLKIT WITH GREAT INFORMATION ON CHILD RELATED TAX BENEFIT COMPARISONS. THE COMPARISON CHART INCLUDES CTC AND ODC AS WELL AS SEVERAL OTHER RELATED TAX BENEFITS. THE ENTIRE TAX PREPARER TOOLKIT IS AN EXTREMELY VALUABLE RESOURCE FOR YOU BECAUSE THIS TOOLKIT HAS EVERYTHING YOU NEED TO ASSIST YOU WITH PREPARING ACCURATE RETURNS, MEETING YOUR DUE DILIGENCE REQUIREMENTS, AND GETTING YOUR CLIENTS THE CREDITS THEY DESERVE. SO AGAIN, DO NOT FORGET TO BOOKMARK THIS SITE. THE AOTC IS A TAX CREDIT TO HELP PAY FOR EDUCATION EXPENSES, PAY FOR THE FIRST FOUR YEARS OF POST-SECONDARY EDUCATION. WE'D LIKE TO POINT OUT THAT EVEN THOUGH THE TITLE OF THIS PRESENTATION SAYS OTHER CHILD RELATED CREDITS, TAXPAYERS WITHOUT CHILDREN CAN TAKE ADVANTAGE OF THIS CREDIT, TAXPAYERS CAN GET A MAXIMUM ANNUAL AMOUNT OF $2,500 PER ELIGIBLE STUDENT AND 40% OR $1000, EXCUSE ME, COULD BE REFUNDED IF THEY OWE NO TAX. THE AMOUNT OF THE CREDIT IS 100% OF THE FIRST $2,000 OF QUALIFIED EDUCATION EXPENSES YOUR CLIENT PAID FOR EACH ELIGIBLE STUDENT AND THEN 25% OF THE NEXT $2,000 OF QUALIFIED EXPENSES, EDUCATION EXPENSES, YOUR CLIENT PAID FOR THAT STUDENT. THE AOTC IS PHASED OUT IF THE CLIENT'S MODIFY ADJUSTED INCOME EXCEEDS CERTAIN LEVELS. THE MODIFIED ADJUSTED INCOME GROSS INCOME IS ADJUSTED GROSS INCOME PLUS CERTAIN TAX-FREE INCOME FROM SOURCES OUTSIDE OF THE UNITED STATES. FOR 2021, THE MODIFIED ADJUSTED GROSS INCOME PHASE-OUT RANGE FOR UNMARRIED INDIVIDUALS WAS $80,000 TO $90,000. THE AOTC IS GENERALLY THE MOST VALUABLE EDUCATION TAX CREDIT. TAXPAYERS CAN CLAIM THIS CREDIT EVEN IF THEY PAID FOR SCHOOL WITH A STUDENT LOAN. PARENTS CAN CLAIM AOTC FOR AN ELIGIBLE STUDENT IF THE PARENTS ARE NOT FILING MARRIED, FILING SEPARATELY. THE STUDENT CANNOT CLAIM AOTC ON THEIR TAX RETURN IF THE CREDIT IS CLAIMED BY THEIR PARENTS. WHO'S ELIGIBLE FOR AOTC, TO BE ELIGIBLE FOR AOTC, THE STUDENT MUST BE YOU, YOUR SPOUSE, OR YOUR DEPENDENT THAT YOU HAVE LISTED ON YOUR TAX RETURN, THE STUDENT MUST BE PURSUING A DEGREE OR OTHER RECOGNIZED EDUCATION CREDENTIALS, THE STUDENT MUST HAVE QUALIFIED EDUCATION EXPENSES AT AN ELIGIBLE EDUCATIONAL INSTITUTION, THE STUDENT MUST ALSO BE ENROLLED AT LEAST HALF TIME FOR AT LEAST ONE ACADEMIC PERIOD. THIS PERIOD IS AT THE BEGINNING OF THE TAX YEAR, THE STUDENT CANNOT HAVE FINISHED THE FIRST FOUR YEARS OF HIGHER EDUCATION AT THE BEGINNING OF THE TAX YEAR, THEY CANNOT HAVE CLAIMED THE AOTC OR THE FORMER HOPE CREDIT FOR MORE THAN FOUR TAX YEARS AND THEY CANNOT HAVE A FELONY DRUG CONVICTION AT THE END OF THE TAX YEAR. THE SCHOOLS DETERMINE THE ACADEMIC PERIODS. FOR SCHOOLS THAT USE CREDIT HOURS AND DO NOT HAVE ACADEMIC TERMS, THE PAYMENT PERIOD, THE PAYMENT PERIOD MAY BEGIN, MAY BE TREATED AS AN ACADEMIC PERIOD. SORRY, NOW LET'S DISCUSS SOME COMMON ERRORS THAT ARE MADE WHEN CLAIMING AOTC.

THE MOST COMMON ERROR INVOLVES CLAIMING AOTC FOR A STUDENT WHO DID NOT ATTEND AN ELIGIBLE EDUCATIONAL INSTITUTION, THE AOTC IS FOR POST-SECONDARY EDUCATION, WHICH MAY INCLUDE EDUCATION AT A COLLEGE, UNIVERSITY, OR TECHNICAL SCHOOL. TO BE AN ELIGIBLE EDUCATIONAL INSTITUTION, THE SCHOOL MUST BE ABLE TO PARTICIPATE IN THE U.S. DEPARTMENT OF EDUCATION STUDENT AID PROGRAM. THE SECOND MOST COMMON ERROR MADE WHEN CLAIMING THE AOTC INVOLVES CLAIMING THE CREDIT FOR A STUDENT WHO DIDN'T PAY QUALIFYING COLLEGE EXPENSES. EDUCATION EXPENSES MUST BE ALLOWABLE EXPENSES PAID OR CONSIDERED PAID BY YOUR CLIENT, YOUR CLIENT'S SPOUSE OR THE STUDENT CLAIMED AS A DEPENDENT ON THE TAX RETURN. THE FINAL ERROR, WE WILL DISCUSS TODAY WHEN CLAIMING THE AOTC INVOLVES CLAIMING AOTC FOR A STUDENT FOR TOO MANY YEARS. THE AOTC IS ONLY AVAILABLE FOR THE FIRST FOUR YEARS OF POST-SECONDARY EDUCATION AND CAN ONLY BE CLAIMED FOR FOUR TAX YEARS PER ELIGIBLE STUDENT. THIS LIMITATION INCLUDES ANY YEARS YOUR CLIENT MAY HAVE CLAIMED THE HOPE CREDIT. WHAT ARE WAYS YOU CAN AVOID THESE COMMON ERRORS, YOU GUESS CORRECTLY? ASK QUESTIONS AND DOCUMENT YOUR ANSWERS.

PUBLICATION 4687 TITLED PAID PREPARER DUE DILIGENCE IS MORE THAN A CHECK MARK ON A FORM, IT HAS EXAMPLES THAT CAN ASSIST YOU AS WELL. THE FORM 1098-T IS A GOOD INDICATOR THAT YOUR CLIENT IS ELIGIBLE FOR THE AOTC, BUT IT DOES NOT CONTAIN ALL INFORMATION NEEDED TO DETERMINE ELIGIBILITY FOR THE CREDIT OR TO COMPUTE THE AMOUNT OF THE CREDIT. YOU MUST ALSO FIND OUT WHETHER YOUR CLIENT RECEIVED A SCHOLARSHIP OR ANY SCHOLARSHIPS, HOW AND WHEN THE EXPENSES WERE PAID, WHETHER YOUR CLIENT HAS A FELONY DRUG CONVICTION AND WHETHER YOUR CLIENT CLAIMED THE AOTC OR THE HOPE CREDIT PREVIOUSLY AND, IF SO, FOR HOW MANY YEARS. LET'S TAKE A LOOK AT MORE HELPFUL RESOURCES THAT CAN ASSIST YOU WITH CLAIMING AOTC. THE TAX PREPARER TOOLKIT IS A GREAT RESOURCE. YOU WILL FIND HELPFUL TOOLS SUCH AS THE EDUCATION CREDIT COMPARISON CHART AND A SECTION TITLED WHAT TAX RETURN PREPARERS NEED TO KNOW. THE TOOLKIT HAS LINKS THAT WILL PROVIDE YOU WITH MORE INFORMATION ABOUT REVIEWING THE FORM 1098-T AND WHAT TO DO IF YOUR STUDENT DIDN'T RECEIVE IT. THERE YOU WILL ALSO FIND A LINK TO THE FORM 886-H-AOC. THE FORM 886-H-AOC INCLUDES A LIST OF RECOMMENDED DOCUMENTS A TAXPAYER CAN PROVIDE TO THE IRS DURING THE AUDIT PROCESS TO CONFIRM THEIR CHILD'S ELIGIBILITY FOR AOTC. THESE FORMS CAN ALSO BE HELPFUL AS DISCUSSION PROMPTS WHEN YOU'RE INTERVIEWING AND EDUCATING YOUR CLIENTS. THE NEXT TOPIC WE WILL COVER IS THE HEAD OF HOUSEHOLD FILING STATUS. THE IRS DEFINITION OF HEAD OF HOUSEHOLD IS GENERALLY AN UNMARRIED TAXPAYER WHO HAS DEPENDENTS AND PAID FOR MORE THAN HALF OF THE COSTS OF KEEPING THE HOME FOR THE YEAR. THIS TAX FILING STATUS COMMONLY INCLUDES SINGLE PARENT, DIVORCED OR PARENTS WHO WERE LEGALLY SEPARATED BY THE LAST DAY OF THE YEAR, AND WHO HAVE CUSTODY OF A DEPENDENT. TO FILE FOR HEAD OF HOUSEHOLD, YOU MUST MEET THE FOLLOWING: PAY FOR MORE THAN HALF OF THE HOUSEHOLD EXPENSES, BE CONSIDERED UNMARRIED FOR THE TAX YEAR AND MUST HAVE A QUALIFYING CHILD OR DEPENDENT. EITC CENTRAL HAS A LINK TO THE IRS ONLINE TOOL CALLED THE INTERACTIVE TAX ASSISTANT OR ITA, THAT'S LOCATED AT WWW.EITC.IRS.GOV. IT IS A HELPFUL TOOL TO USE WHEN TRYING TO DETERMINE YOUR CLIENT'S FILING STATUS. NOW LET'S TAKE A MOMENT AND WE WILL USE THE NEXT TWO SLIDES TO UNPACK WHAT IT REALLY MEANS TO BE CONSIDERED UNMARRIED. WE KNOW THAT TO QUALIFY FOR HEAD OF HOUSEHOLD FILING STATUS, YOUR CLIENT MUST EITHER BE UNMARRIED OR CONSIDERED UNMARRIED ON THE LAST DAY OF THE TAX YEAR. TO BE CONSIDERED UNMARRIED, YOUR CLIENT MUST MEET FIVE TESTS. THE FIRST TWO ARE SHOWN ON THIS SLIDE. THOSE STATE THAT YOUR CLIENT MUST FILE A SEPARATE RETURN AND PAY MORE THAN HALF THE COST OF KEEPING THEIR HOME FOR THE TAX YEAR. WHEN DETERMINING THE COST OF KEEPING UP A HOME, PLEASE INCLUDE THE COST OF EXPENSES SUCH AS RENT, MORTGAGE INTEREST, REAL ESTATE TAXES, INSURANCE ON THE HOME, REPAIRS, UTILITIES AND FOOD EATEN IN THE HOME, DO NOT INCLUDE THE COST OF CLOTHING, EDUCATION, MEDICAL TREATMENT, VACATION, LIFE INSURANCE OR TRANSPORTATION.

ALSO DO NOT INCLUDE THE VALUE OF YOUR CLIENT'S SERVICES OR THOSE OF A MEMBER OF THE HOUSEHOLD.

HERE ARE THE FINAL THREE OF THE FIVE TESTS THAT ARE REQUIRED TO BE CONSIDERED UNMARRIED AND FILE HEAD OF HOUSEHOLD. YOUR CLIENT'S SPOUSE DID NOT LIVE IN THE HOME DURING THE LAST SIX MONTHS OF THE TAX YEAR. YOUR CLIENT'S SPOUSE IS CONSIDERED TO LIVE IN THE HOME EVEN IF SHE OR HE IS TEMPORARILY ABSENT DUE TO SPECIAL CIRCUMSTANCES. SPECIAL CIRCUMSTANCES INCLUDE ABSENCE DUE TO ILLNESS, SCHOOL, BUSINESS, VACATION AND OR MILITARY SERVICE. FOR INFORMATION, PLEASE REFER TO PUBLICATION 501 TITLED DEPENDENTS, STANDARD DEDUCTION AND FILING INFORMATION. YOUR CLIENT'S HOME WAS THE MAIN HOME OF THEIR CHILD, STEPCHILD OR FOSTER CHILD FOR MORE THAN HALF THE YEAR. YOUR CLIENT MUST BE ABLE TO CLAIM THE CHILD AS A DEPENDENT. HOWEVER THEY MEET THIS REQUIREMENT IF THEY CAN'T CLAIM THE CHILD AS A DEPENDENT ONLY BECAUSE THE NON-CUSTODIAL PARENT CAN CLAIM THE CHILD USING SPECIAL RULES FOR CHILDREN OF DIVORCED OR SEPARATED PARENTS OR PARENTS WHO LIVE APART, YOUR CLIENT IS CONSIDERED UNMARRIED FOR HEAD OF HOUSEHOLD PURPOSES IF THE SPOUSE WAS A NON-RESIDENT ALIEN AT THE TIME DURING THE YEAR. AND THE CLIENT DOES NOT CHOOSE TO TREAT THE NON-RESIDENT SPOUSE AS A RESIDENT SPOUSE, AS A RESIDENT ALIEN. HOWEVER, YOUR CLIENT'S SPOUSE ISN'T A QUALIFYING PERSON FOR HEAD OF HOUSEHOLD PURPOSES. YOUR CLIENT MUST HAVE ANOTHER QUALIFYING PERSON AND MEET THE OTHER TEST TO BE ELIGIBLE TO FILE FOR HEAD OF HOUSEHOLD. SEE PUBLICATION 519 TITLED U.S. TAX GUIDE FOR ALIENS FOR MORE INFORMATION ABOUT TREATING A SPOUSE AS A NON-RESIDENT ALIEN. YVETTE, HOW ABOUT WE STOP HERE FOR A FINAL POLLING QUESTION? YVETTE BROOKS-WILLIAMS: I THINK THAT'S A FANTASTIC IDEA, IRIS. SO AUDIENCE HERE IS OUR FOURTH AND FINAL POLLING QUESTION. NOW THE QUESTION IS YOUR CLIENT MAY BE ABLE TO FILE AS HEAD OF HOUSEHOLD IF THEY MEET WHICH OF THE FOLLOWING REQUIREMENTS. A, THE CLIENT IS UNMARRIED OR CONSIDERED UNMARRIED ON THE LAST DAY OF THE YEAR. B, THE CLIENT PAID MORE THAN HALF OF THE COST OF KEEPING UP A HOME FOR THE YEAR. C, A QUALIFYING PERSON LIVED WITH YOUR CLIENT IN THE HOME FOR MORE THAN HALF THE YEAR OR D, ALL OF THE ABOVE. SO TAKE A MINUTE. OOPS, SORRY, TAKE A MINUTE TO SELECT THE CORRECT ANSWER USING THE RADIO BUTTONS. SORRY, I HAVE SOME PROBLEMS WITH MY LITTLE MOUSE HERE. OKAY, HERE WE ARE. YES, SO TAKE A MOMENT AND CLICK THE RADIO BUTTON THAT BEST ANSWERS THE QUESTION. YOUR CLIENT MAY BE ABLE TO FILE AS HEAD OF HOUSEHOLD IF THEY MEET WHICH OF THE FOLLOWING REQUIREMENTS. A, THE CLIENT IS UNMARRIED OR CONSIDERED UNMARRIED ON THE LAST DAY OF THE YEAR. B, THE CLIENT PAID MORE THAN HALF THE COST OF KEEPING UP THE HOME FOR THE YEAR.

C, A QUALIFYING PERSON LIVED WITH YOUR CLIENT IN THE HOME FOR MORE THAN HALF THE YEAR. OR IS IT D, ALL OF THE ABOVE. SO I'LL GIVE YOU A FEW MORE SECONDS TO MAKE YOUR SELECTION. OKAY, WE'RE GOING TO STOP THE POLLING NOW AND LET'S SHARE THE CORRECT ANSWER ON THE NEXT SLIDE. AND THE CORRECT RESPONSE IS D, ALL OF THE ABOVE. OH MY GOODNESS, YOU GUYS HAVE JUST MADE ME SO PROUD OF YOU. 98% OF YOU RESPONDED CORRECTLY. THAT IS AN AMAZING RESPONSE RATE. SO COURTNEY, I'M GOING TO TURN IT OVER TO YOU. AND IRIS, YOU DID A REALLY GOOD JOB EXPLAINING THAT INFORMATION FOR OUR AUDIENCE.

COURTNEY KING: CONGRATULATIONS EVERYONE. THAT'S A TOUGH ACT TO FOLLOW. 98% ACCURACY. THAT'S EXCELLENT THOUGH, SO LET'S TALK NOW ABOUT DUE DILIGENCE. TO START, I WILL SAY BY LAW, IF YOU ARE PAID TO PREPARE A TAX RETURN OR A CLAIM FOR REFUND CLAIMING ONE OR MORE OF THE TAX BENEFITS SHOWN ON THE SCREEN, THEN YOU MUST MEET ALL FOUR DUE DILIGENCE REQUIREMENTS. THE PREPARER PENALTY FOR 2023, FOR THIS YEAR, IT IS GOING TO BE $560 PER FAILURE. THAT AMOUNTS UP TO $2,240 POTENTIALLY PER TAX RETURN IF A PREPARER FAILS TO BE DILIGENT IN CLAIMING ALL OF THE TAX BENEFITS ON ONE RETURN.

SO IT CAN BE VERY, VERY COSTLY. AS A PAID PREPARER, YOU MUST COMPLY WITH THE FOLLOWING FOUR DUE DILIGENCE REQUIREMENTS. AND THEY ARE: FIRSTLY COMPUTE THE CREDITS BASED ON THE FACTS, COMPLETE AND SUBMIT THE FORM 8867, WHICH IS THE PAID PREPARER'S DUE DILIGENCE CHECKLIST, NEXT, KEEP RECORDS AND FINALLY ASK ALL THE RIGHT QUESTIONS. YOU'VE GOT TO KNOW THE EITC AS WELL AS THE CTC, ACTC, ODC, THE AOTC, AS WELL AS THE HEAD OF HOUSEHOLD TAX LAWS VERY THOROUGHLY. AND YOU'VE GOT TO EVALUATE YOUR CLIENTS' PERSONAL SITUATIONS AS WELL AS THE INFORMATION THAT THEY PRESENT TO YOU AND THEIR ELIGIBILITY. AND IF YOU HAVE ANY REASON TO DOUBT OR TO QUESTION THE CORRECTNESS, THE CONSISTENCY OR THE COMPLETENESS OF ANY INFORMATION USED TO DETERMINE YOUR CLIENT'S ELIGIBILITY, THEN YOU MUST ASK YOUR CLIENT ADDITIONAL QUESTIONS. AND I'M GOING TO SAY IT AGAIN AND EMPHASIZE IT. DOCUMENT, DOCUMENT, DOCUMENT IN YOUR FILES AT THE TIME OF THE INTERVIEW, THE QUESTIONS THAT YOU ASK YOUR CLIENT AS WELL AS YOUR CLIENT ANSWERS TO THOSE QUESTIONS AND COMPUTE THE CREDITS AND COMPLETE THE APPLICABLE WORKSHEETS ON YOUR OR YOUR OWN WORKSHEETS IF YOU CHOOSE, FOR ANY CREDIT CLAIMED ON THE RETURN OR CLAIM FOR REFUND. AND JUST AS A SIDE NOTE, MOST PROFESSIONAL TAX RETURN PREPARATION SOFTWARE INCLUDES THE WORKSHEETS ALREADY. SO I SAID A MOMENT AGO THAT YOU HAVE TO COMPLETE THE FORM 8867, AND HERE YOU SEE IT ON YOUR SCREEN. IT IS AGAIN TITLED PAID PREPARER'S DUE DILIGENCE CHECKLIST. AND YOU'VE GOT TO SUBMIT THIS COMPLETED FORM TO THE IRS WITH EVERY ELECTRONIC OR PAPER RETURN OR CLAIM FOR REFUND THAT YOU PREPARE THAT CLAIMS THE EITC, CTC, ACTC, ODC, AOTC, OR HEAD OF HOUSEHOLD FILING STATUS. ANSWER EACH QUESTION ON THE FORM BASED ON THE INFORMATION FROM YOUR CLIENT AND FROM THE INFORMATION THAT YOU KNOW IS TRUE, YOU MUST ALSO PERSONALLY COMPLETE PART VI, WHICH IS ELIGIBILITY CERTIFICATION. YOU NEED TO KEEP EITHER ELECTRONIC OR PAPER COPIES OF THE FORM 8867 ALONG WITH THE APPLICABLE WORKSHEETS OR YOUR OWN WORKSHEETS AND ANY TAXPAYER DOCUMENTS THAT YOU MAY HAVE RELIED ON TO DETERMINE THEIR ELIGIBILITY FOR THE CREDITS AND/OR HEAD OF HOUSEHOLD FILING STATUS OR TO COMPUTE THE AMOUNT OF THE CREDITS. YOU SHOULD ALSO KEEP A RECORD OF HOW, WHEN AND FROM WHOM THE INFORMATION USED TO PREPARE THE FORM 8867 AND THE WORKSHEETS WAS OBTAINED. KEEP THESE DOCUMENTS FOR THREE YEARS FROM THE LATEST OF THE DUE DATE OF THE TAX RETURN, THE DATE THE TAX RETURN WAS ELECTRONICALLY FILED, OR FOR A PAPER RETURN, THE DATE THE RETURN OR CLAIM FOR REFUND WAS PRESENTED TO YOUR CLIENT FOR THEIR SIGNATURE. OR IF YOU ARE A NON-SIGNING TAX RETURN PREPARER, THE LATEST OF THE DATE YOU SUBMITTED TO THE TAX RETURN I'M SORRY, TO THE SIGNING TAX RETURN PREPARER, THE PART OF THE RETURN FOR WHICH YOU WERE RESPONSIBLE. AND AGAIN, YOU CAN KEEP THESE RECORDS EITHER IN PAPER OR ELECTRONIC FORMAT, BUT YOU MUST PRODUCE THE RECORDS IF THE IRS REQUESTS THEM. AND IT'S ALSO GREAT TO KEEP A BACKUP OF THESE RECORDS IN A SEPARATE AND SECURE LOCATION. TO AVOID ERRORS, WE RECOMMEND THAT YOU KNOW THE TAX LAW FOR EACH OF THE CREDITS AND THE HEAD OF HOUSEHOLD FILING STATUS, INCLUDING THE ELIGIBILITY RULES. AND ALSO BEAR IN MIND THAT SOFTWARE IS NOT A SUBSTITUTION FOR KNOWLEDGE OF THE LAW. PUBLICATION 4687, WHICH IS TITLED PAID PREPARER DUE DILIGENCE IS MORE THAN A CHECK MARK ON A FORM AS WELL AS OUR TAX RETURN PREPARER TOOLKIT ARE EXTREMELY HELPFUL TOOLS THAT YOU CAN USE TO MEET YOUR DUE DILIGENCE RESPONSIBILITIES.

ALSO, TREASURY REGULATION 1.6695-2 ALSO EXPLAINS THE ACTIONS A PAID PREPARER MUST TAKE TO MEET DUE DILIGENCE REQUIREMENTS AND AVOID THE DUE DILIGENCE PENALTIES UNDER INTERNAL REVENUE CODE SECTION 6695(G). SO AS WE PREPARE TO END OUR SESSION TODAY, I'D LIKE TO SHARE THE MOST FREQUENTLY ASKED QUESTION WE RECEIVE FROM TAX PROFESSIONALS REGARDING THEIR DUE DILIGENCE REQUIREMENTS. THE MOST COMMON QUESTION IS, ARE TAX RETURN PREPARERS REQUIRED TO KEEP SPECIFIC DOCUMENTS IN THE CLIENTS' FOLDERS? AND THE ANSWER TO THAT IS THE TREASURY REGULATION FOR DUE DILIGENCE DOES NOT REQUIRE YOU TO SECURE SPECIFIC DOCUMENTS FROM YOUR CLIENTS UNLESS THE DOCUMENTS WERE PROVIDED BY YOUR CLIENTS AND YOU RELIED ON THOSE DOCUMENTS TO DETERMINE ELIGIBILITY OR TO COMPUTE THE AMOUNT OF THE CREDIT.

AND WE ARE AT THE END OF OUR PRESENTATION AND WE'D JUST LIKE TO THANK YOU AS ALWAYS FOR YOUR TIME AND YOUR ATTENDANCE TODAY. BUT DON'T LEAVE JUST YET. WE DO HOPE THAT YOU ENJOYED THE PRESENTATION. AND SO NOW I'M GOING TO HAND THINGS BACK OVER TO OUR MODERATOR, YVETTE, AND SHE'S GOING TO DISCUSS SOME VERY IMPORTANT ADMINISTRATIVE INFORMATION WITH YOU. AND IF YOU NEED TO CONTACT ME OR MY TEAM, YOU MAY DO SO BY EMAILING US AT EITC.PROGRAM@IRS.GOV. YVETTE, I'M GOING TO HAND IT BACK OVER TO YOU NOW. YVETTE BROOKS-WILLIAMS: THANK YOU, COURTNEY, AND THANK YOU, IRIS.

HELLO AGAIN, IT'S ME, YVETTE BROOKS-WILLIAMS, AND I WILL BE MODERATING THE Q&;A SESSION. NOW, BEFORE WE START THE Q&;A SESSION, I WANT TO THANK EVERYONE FOR ATTENDING TODAY'S PRESENTATION LOOKING TO TAX YEAR 2022: AMERICAN RESCUE PLAN TAX CHANGES TO EARNED INCOME TAX CREDIT, AND OTHER CHILD-RELATED CREDIT. NOW, EARLIER I MENTIONED WE WANT TO KNOW WHAT QUESTIONS YOU HAVE FOR OUR PRESENTERS. SO HERE'S YOUR OPPORTUNITY. NOW, IF YOU HAVEN'T INPUT YOUR QUESTIONS, THERE'S STILL TIME. SO GO AHEAD AND CLICK ON THE DROPDOWN ARROW NEXT TO ASK QUESTION FIELD, TYPE IN YOUR QUESTION AND CLICK SEND. THANKFULLY, IRIS AND COURTNEY ARE STAYING ON WITH US TO ANSWER YOUR QUESTIONS. AND ONE MORE THING BEFORE WE START. NOW, WE MAY NOT HAVE TIME TO ANSWER ALL OF THE QUESTIONS SUBMITTED, BUT WE WILL ANSWER AS MANY AS TIME ALLOWS. SO LET'S GET STARTED SO WE CAN GET TO AS MANY QUESTIONS AS POSSIBLE. SO A QUESTION WE HAVE HERE, IS THERE AN INCOME LIMIT FOR AOTC?

COURTNEY, YOU WANT TO TAKE THAT? COURTNEY KING: SURE, YVETTE. I'LL GO AHEAD AND TAKE THAT. IN SHORT, YES, THERE IS AN INCOME LIMIT EXCUSE ME. AND SO TO CLAIM THE FULL CREDIT, YOUR CLIENTS 2022 MODIFIED ADJUSTED GROSS INCOME THAT HAS TO BE $90,000 OR LESS. AND IN THE CASE OF A JOINT COUPLE, $180,000 OR LESS FOR MARRIED FILING JOINTLY. AND IF THE CLIENTS MODIFIED AGI IS OVER THAT $80,000 LIMIT, BUT LESS THAN $90,000 OR IN THE CASE OF A JOINT TAXPAYER JOINT FILERS THAT WOULD BE A IF IT'S OVER $160,000 BUT LESS THAN $180,000, THEN THE AMOUNT OF THE CREDIT IS ACTUALLY REDUCED, IT BEGINS TO PHASE OUT. AND SO IF THE CLIENT'S MODIFIED AGI IS OVER $90,000, OR IN THE CASE OF MARRIED FILING JOINTLY $180,000, THEN THE CLIENT'S AOTC IS PHASED OUT COMPLETELY AND CANNOT CLAIM THE CREDIT. AND SO FOR MORE INFORMATION ON THAT THEN I'LL JUST ASK EVERYONE TO CHECK OUT THE PUBLICATION 970 OR THE INSTRUCTIONS FOR THE FORM 8863. YVETTE BROOKS-WILLIAMS: THANK YOU FOR THAT, COURTNEY. NOW HERE'S ANOTHER QUESTION WE HAVE, TO MEET RESIDENCY REQUIREMENTS TO CLAIM EITC, YOUR CHILD MUST HAVE LIVED WITH YOU IN THE UNITED STATES FOR MORE THAN HALF OF 2022. NOW, DOES THAT INCLUDE PUERTO RICO OR U.S. POSSESSIONS SUCH AS GUAM? COURTNEY KING: THAT IS A GOOD QUESTION. YES THAT'S A GOOD QUESTION. SHORT ANSWER IS NO. THE CHILD MUST HAVE LIVED WITH THE TAXPAYER IN THE UNITED STATES, AND THAT DOES MEAN THE 50 UNITED STATES I'M SORRY, THE 50 STATES AS WELL AS THE DISTRICT OF COLUMBIA. IT DOES NOT INCLUDE PUERTO RICO OR U.S. POSSESSIONS SUCH AS GUAM. AND SO AGAIN WE REFER EVERYONE TO PUBLICATION 596 FOR MORE INFORMATION ON THAT. YVETTE BROOKS-WILLIAMS: OKAY, THANK YOU. ANOTHER QUESTION WE HAVE IS, CAN MY CLIENT CLAIM SELF-ONLY EITC IF HIS DEPENDENT DOES NOT HAVE A VALID SSN? COURTNEY KING: GOOD QUESTION YET AGAIN. SURE, SURE.

ANOTHER GREAT QUESTION. THE CLIENT CAN CLAIM THE SELF-ONLY EITC USING THE EITC WITHOUT A QUALIFYING CHILD RULE, EVEN IF THEIR DEPENDENT DOES NOT HAVE A VALID SOCIAL SECURITY NUMBER. AND AS WE ALL RECALL PREVIOUSLY, IF YOU HAD A DEPENDENT WHO DID NOT HAVE A VALID SSN, YOU COULDN'T CLAIM ANY EITC. SO THIS IS ONE CHANGE RESULTING FROM THE RECENT LEGISLATION. SO SHORT ANSWER TO THAT IS YES, THEY CAN CLAIM THE SELF-ONLY EITC. YVETTE BROOKS-WILLIAMS: OKAY. COURTNEY, WOULD YOU MIND GIVING US AN EXAMPLE OF WHEN THE TIE-BREAKER RULE WOULD APPLY? COURTNEY KING: SURE. OKAY. LET ME THINK ABOUT THIS AND JUST KIND OF PULL SOME FACTS TOGETHER. THE TIE-BREAKER IS SOMETHING THAT TAXPAYERS COME ACROSS VERY FREQUENTLY. SO LET'S SAY YOU HAVE A 2-YEAR-OLD SON AND WE WILL JUST SAY THE SON'S NAME IS JIMMY. JIMMY LIVED WITH THE TAXPAYER WITH THE WITH YOUR, THE TAXPAYER'S MOTHER, YOUR MOTHER ALL YEAR. AND JIMMY'S FATHER DID NOT LIVE WITH YOU OR WITH JIMMY. SO HE'S NOT A QUALIFYING CHILD OF ANYONE ELSE. AND NOT THE FATHER. LET'S ALSO SAY THE TAXPAYER. YOU'RE 25-YEARS-OLD, UNMARRIED HAVE A MODIFIED AGI WE'LL SAY $25,000. AND AGAIN, BECAUSE YOU LIVE WITH YOUR MOTHER. THE MOTHER'S INCOME WAS $22,000 FROM HER JOB. SO SHE HAS A AGI OF $22,000. SO IN A SITUATION LIKE THIS, WHICH IS COMMON WITH MIXED HOUSEHOLDS, SO WHO CAN CLAIM JIMMY, THE CHILD FOR THE EITC. AND AGAIN, IN THIS SCENARIO WE HAVE YOU THE TAXPAYER, WE HAVE THE MOTHER. SO WOULD IT BE EITHER ONE OF YOU? WOULD IT BE EITHER THE MOTHER OR EITHER THE TAXPAYER OR NEITHER? AND SO THE SITUATION LIKE THIS, YOU AS THE TAXPAYER WOULD BE THE ONLY TAXPAYER ENTITLED TO CLAIM THE JIMMY AS A QUALIFYING CHILD. NOW, JIMMY IS A QUALIFYING CHILD OF BOTH YOU AND YOUR MOTHER, BECAUSE OBVIOUSLY HE MEETS THE RELATIONSHIP, AGE AND RESIDENCY TEST AS WELL AS THE JOINT RETURN TEST FOR BOTH YOU AND YOUR MOTHER ALL LIVING IN THE SAME HOUSEHOLD. BUT ONLY ONE OF YOU CAN TREAT HIM AS A QUALIFYING CHILD TO CLAIM THE EITC. SO THE DIFFERENCE IS BECAUSE YOUR MOTHER'S AGI IS NOT HIGHER THAN YOURS, YOUR MOTHER'S AGI IS $22,000 AND YOURS IS $25,000, SHE CANNOT CLAIM JIMMY AS THE QUALIFYING CHILD, ONLY YOU CAN CLAIM HIM AS A QUALIFYING CHILD. SO I HOPE THOSE SET OF FACTS AND SCENARIOS MADE SENSE TO EVERYONE. BUT FOR MORE INFORMATION, WE'D JUST LIKE TO ALWAYS REFER EVERYONE BACK TO THE PUBLICATION 596 WHERE WE HAVE A LOT OF GREAT INFORMATION AND A VERY THOROUGH BREAKDOWN OF THE TIE-BREAKER RULES THAT YOU CAN UTILIZE IN YOUR PRACTICES. YVETTE BROOKS-WILLIAMS: YES, COURTNEY, THAT WAS A GREAT EXAMPLE. I HAVE ANOTHER QUESTION HERE. IF A TAXPAYER SPOUSE DIED IN A PRIOR YEAR AND THEIR SON OR DAUGHTER LIVES AT HOME WITH THE PARENT AND HAS PARTIAL DISABILITY, BUT THEY'RE OVER AGE 18, CAN THE TAXPAYER QUALIFY AS HEAD OF HOUSEHOLD FILING STATUS? AND WHAT DOCUMENTATION DOES THE PREPARER NEED TO COMPLY WITH THE FORM 8867 CHECKLIST? COURTNEY KING: THIS IS ANOTHER GREAT QUESTION FROM THE AUDIENCE. POTENTIALLY THE TAXPAYER COULD QUALIFY, BUT PROBABLY WHAT WOULD BE BEST IS TO REFER TO THE INTERACTIVE TAX ASSISTANT THAT WE HAVE ON IRS.GOV THAT WILL BE OF GREAT ASSISTANCE IN HELPING TO DETERMINE THE FILING STATUS. ALSO AS IRIS MENTIONED IN HER PRESENTATION, THE FORM 886-H-HOH, WHICH WE ALSO HAVE ON IRS.GOV, THAT IS A GREAT REFERENCE TOOL TO USE FOR SUPPORTING DOCUMENTS FOR HEAD OF HOUSEHOLD FILING STATUS. SO GOING THROUGH THOSE WITH THE TAXPAYER MAY ALSO HELP THE PREPARER IN ARRIVING AT A DETERMINATION OF ELIGIBILITY. AND SO FOR COMPLETE INFORMATION ON FILING STATUSES, YOU CAN LOOK AT PUBLICATION 17 ON IRS.GOV. YOU CAN ALSO LOOK AT PUBLICATION 501 BOTH OF WHICH WERE ON IRS.GOV. YVETTE BROOKS-WILLIAMS: THANK YOU FOR THAT, COURTNEY. ANOTHER QUESTION WE HAVE FROM THE AUDIENCE IS, WHAT IS A RESIDENT ALIEN? COURTNEY KING: ANOTHER GREAT QUESTION. IN GENERAL, A RESIDENT ALIEN IS SOMEONE FOR TAX PURPOSES. WE'RE SPEAKING OF WHO IS NOT A CITIZEN OR NATIONAL OF THE UNITED STATES, AND WHO MEETS EITHER THE GREEN CARD TEST OR THE SUBSTANTIAL PRESENCE, I'M SORRY, SUBSTANTIAL PRESENCE TEST FOR THE CALENDAR YEAR. SO THOSE TWO TESTS, EITHER THE GREEN CARD TEST OR SUBSTANTIAL PRESENCE TEST, THOSE ARE THE DETERMINING FACTORS AS TO WHETHER AN INDIVIDUAL IS A RESIDENT ALIEN FOR TAX PURPOSES. AND SO FOR COMPLETE DETAILS ON THAT YOU CAN ALWAYS REFER TO PUBLICATION 54 ON IRS.GOV. YVETTE BROOKS-WILLIAMS: THANK YOU, COURTNEY. AND WHAT WAS THE LINK FOR THE EITC TO ACCESS THE TAX PREPARER TOOLKIT? DO YOU HAVE THAT? COURTNEY KING: YES. YOU CAN GO TO EITC.IRS.GOV OR IF YOU SIMPLY JUST GO TO IRS.GOV AND ENTER TAX PREPARER TOOLKIT IN THE SEARCH FIELD, YOU WILL SEE THE LINK TO THE PREPARER TOOLKIT IN THE SEARCH RESULTS. YVETTE BROOKS-WILLIAMS: THANK YOU. THANK YOU. AUDIENCE. I AM SAD TO SAY THAT THAT'S ALL THE TIME WE HAVE FOR QUESTIONS. I WANT TO THANK OUR PRESENTERS FOR SHARING THEIR KNOWLEDGE AND EXPERTISE AND FOR ANSWERING YOUR QUESTIONS. BEFORE WE CLOSE THE Q&;A SESSION, IRIS AND COURTNEY, WHAT KEY POINTS DO YOU WANT THE ATTENDEES TO REMEMBER FROM TODAY'S WEBINAR. IRIS PUGH: YVETTE, THANK YOU. THE FOLLOWING ITEMS ARE THE KEY POINTS WE WANT THE AUDIENCE TO REMEMBER. FIRST, WE WANT TO MAKE ONE FINAL APPEAL TO ENCOURAGE YOU ALL TO EXPLORE AND USE THE PREPARER TOOLKIT AS A RESOURCE. IT HAS EVERYTHING YOU NEED TO ASSIST YOU WITH PREPARING ACCURATE RETURNS, MEETING YOUR DUE DILIGENCE REQUIREMENTS, AND GETTING YOUR CLIENTS THE CREDITS THEY DESERVE. SECONDLY, PAID PREPARERS SHOULD MAKE SURE THEY UNDERSTAND THE FOUR DUE DILIGENCE REQUIREMENTS AND HAVE PROCEDURES IN PLACE IN THEIR OFFICE TO ENSURE THE REQUIREMENTS ARE BEING MET. AND LASTLY, BUT NOT LEAST, THE IRS WILL HOLD ITS 17TH ANNUAL AWARENESS DAY ON FRIDAY, JANUARY 27TH. YOU ALL SHOULD JOIN US IN MAKING THIS YEAR'S EVENT JUST AS SUCCESSFUL AS LAST YEAR'S EVENT. WE HAVE PARTNERED WITH MORE THAN 1,500 SUPPORTERS WITH A COMBINED SOCIAL REACH OF OVER 2 MILLION. PARTNERS SPONSORED OVER NEARLY 220 LIVE EVENTS AND OTHER ACTIVITIES SUCH AS NEWS RELEASES AND ARTICLES FOR EITC AWARENESS DAY.

PLEASE EXPLORE OUR PARTNERS OUTREACH TOOLKIT AVAILABLE AT EITC.IRS.GOV UNDER THE PARTNER TOOLKIT TAB FOR IDEAS AND PRODUCTS YOU NEED TO GET THE WORD OUT. THANK YOU, YVETTE. YVETTE BROOKS-WILLIAMS: THANKS, IRIS FOR THOSE KEY POINTS. YES, THANK YOU SO MUCH FOR THE KEY POINTS.

AUDIENCE WE ARE PLANNING ADDITIONAL WEBINARS THROUGHOUT THE YEAR. NOW TO REGISTER FOR ALL UPCOMING WEBINARS, PLEASE VISIT IRS.GOV KEYWORD SEARCH WEBINARS, AND SELECT THE WEBINARS FOR TAX PRACTITIONERS OR WEBINARS FOR SMALL BUSINESSES. WHEN APPROPRIATE, WE WILL BE OFFERING CERTIFICATES AND CE CREDITS FOR UPCOMING WEBINARS. WE INVITE YOU TO VISIT OUR VIDEO PORTAL AT WWW.IRSVIDEOS.GOV. THERE YOU CAN VIEW ARCHIVED VERSIONS OF OUR WEBINARS. PLEASE NOTE CONTINUING EDUCATION CREDIT OR CERTIFICATES OF COMPLETION ARE NOT OFFERED IF YOU VIEW ANY VERSION OF OUR WEBINARS AFTER THE LIVE BROADCAST. AGAIN, A BIG THANK YOU TO IRIS AND TO COURTNEY FOR PROVIDING A GREAT WEBINAR, SHARING THEIR EXPERTISE AND ANSWERING YOUR QUESTIONS. I ALSO WANT TO THANK YOU OUR ATTENDEES FOR ATTENDING TODAY'S WEBINAR, LOOKING TO TAX YEAR 2022: AMERICAN RESCUE PLAN TAX CHANGES TO EARNED INCOME TAX CREDIT AND OTHER CHILD-RELATED TAX CREDITS. NOW, IF YOU ATTENDED TODAY'S WEBINAR FOR AT LEAST 50 MINUTES FROM THE OFFICIAL START OF THE WEBINAR, YOU WILL QUALIFY FOR ONE POSSIBLE CE CREDIT. AGAIN, THE TIME WE SPENT CHATTING FOR THE WEBINAR DOESN'T COUNT TOWARDS THE 50 MINUTES. IF YOU'RE ELIGIBLE FOR CONTINUING EDUCATION FROM THE IRS AND YOU REGISTERED WITH YOUR VALID PTIN, YOUR CREDIT WILL BE POSTED IN YOUR PTIN ACCOUNT. IF YOU QUALIFY AND YOU HAVE NOT RECEIVED YOUR CERTIFICATE AND/OR YOUR CREDIT BY FEBRUARY 10TH, PLEASE SEND US AN EMAIL AT CL.SL.WEB.CONFERENCE.TEAM@IRS. GOV. THE EMAIL ADDRESS IS ALSO SHOWN ON THE SLIDE. NOW, IF YOU ARE INTERESTED IN FINDING OUT WHO YOUR LOCAL STAKEHOLDER LIAISON IS, YOU MAY SEND US AN EMAIL USING THE ADDRESS SHOWN ON THIS SLIDE AND WE WILL GLADLY SEND YOU THAT INFORMATION. NOW, WE WOULD APPRECIATE IT IF YOU COULD TAKE JUST A FEW MINUTES TO COMPLETE A SHORT EVALUATION BEFORE YOU EXIT.

IF YOU'D LIKE TO HAVE MORE SESSIONS LIKE THIS ONE, LET US KNOW. NOW IF YOU HAVE THOUGHTS ON HOW WE CAN MAKE THEM BETTER, BY ALL MEANS, WE WANT TO KNOW THAT AS WELL. IF YOU HAVE REQUESTS FOR FUTURE TOPICS OR PERTINENT INFORMATION YOU'D LIKE TO SEE IN AN IRS FACT SHEET, A TAX TIP, OR A FREQUENTLY ASKED QUESTIONS ON IRS.GOV, THEN PLEASE INCLUDE YOUR SUGGESTIONS IN THE COMMENTS SECTION OF THE SURVEY. CLICK THE SURVEY BUTTON ON THE SCREEN TO BEGIN. IF IT DOESN'T COME UP, CHECK TO MAKE SURE YOU'VE DISABLED THAT POP-UP BLOCKER. AND I JUST WANT TO SAY, IT HAS BEEN AN ABSOLUTE PLEASURE TO BE HERE WITH YOU. AND ON BEHALF OF THE INTERNAL REVENUE SERVICE AND OUR PRESENTERS, WE WOULD LIKE TO THANK YOU FOR ATTENDING TODAY'S WEBINAR. IT IS SO IMPORTANT FOR THE IRS TO STAY CONNECTED WITH THE TAX PROFESSIONAL COMMUNITY, INDIVIDUAL TAXPAYERS, INDUSTRY ASSOCIATIONS ALONG WITH FEDERAL, STATE, AND LOCAL GOVERNMENT ORGANIZATIONS. YOU GUYS MAKE OUR JOB A LOT EASIER BY SHARING THE INFORMATION THAT ALLOWS FOR PROPER TAX REPORTING. SO THANKS AGAIN FOR TAKING TIME OUT OF YOUR DAY TO ATTEND TODAY'S WEBINAR. WE REALLY DO HOPE YOU FOUND THE INFORMATION HELPFUL. YOU MAY EXIT THE WEBINAR AT THIS TIME.