EIC Eligibility and Due Diligence

Author: A.J. Reynolds

Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2028 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card

The earned income tax credit (EIC) is a refundable tax credit that provides a tax break to taxpayers with low to moderate income. Tax professionals who prepare returns claiming the earned income tax credit (EIC) must comply with the IRS’s strict due diligence requirements for each return filed and understand the rules used to determine eligibility for the credit. Failing to comply with the due diligence requirement or filing a return that erroneously claims the EIC can lead to the preparer facing a penalty of $600 (2024) for each failure. This course provides tax preparers with the information they need to comply with due diligence requirements, determine whether a taxpayer qualifies for the EIC, calculate the proper credit amount and identify the penalties for incorrectly claiming the credit.

Publication Date: January 2025

Designed For
All Tax professionals that handle Earned Income Tax Credit clients

Topics Covered

• Seven (7) Rules for everyone
• Additional rules for taxpayers with qualifying children
• Rules for taxpayers without qualifying children
• EIC rules for military
• EIC rules for clergy
• What is Due Diligence
• Paid preparer compliance
• Basic questionnaire checklist
• Training questions addressing common issues
• IRS resources

Learning Objectives

• Identify EIC Qualifications
• Identify rules for qualifying individuals including taxpayers with no children
• Identify requirements for tax preparer due diligence
• Recognize how to complete and analyze Form 8667, Paid Preparer’s Due Diligence
• Identify the questions a preparer should ask a client claiming EIC

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None