Child Tax Credit and Earned Income Credit - Updated for 2025

This course covers the child tax credit (CTC) and the Earned Income Credit (EIC). The training covers all requirements for the credits, how to distinguish refundable vs. non-refundable portions of the credits, as well as aspects unique to the child tax credit, including refundability.

You will gain a thorough understanding of:

• Child Tax Credit (CTC) & Other Dependents Credit (ODC): Eligibility rules, age limits, Social Security number requirements, and AGI phase-outs.
• Qualifying Child vs. Qualifying Relative: Detailed examination of the five tests for qualifying children (relationship, residency, age, support, joint return) and the four rules for qualifying relatives (specified relative/residency, gross income, support, no qualifying child of another), including nuances for divorced parents and multiple support agreements.
• Earned Income Credit (EIC) Rules: The 15 IRS rules governing EIC, covering AGI and earned income limits, Social Security number requirements, filing status for married couples (including exceptions for abandoned spouses and legal separation), U.S. citizen/resident alien status, foreign earned income exclusion, investment income limitations, and what constitutes "earned income" (including non-taxable combat pay and Medicaid waiver payments).
• Credit Mechanics: Distinguishing between refundable and nonrefundable credits, the ordering rules for various credits, and the calculation of the additional child tax credit (refundable portion).
• IRS Calculations and Due Diligence: When the IRS can calculate EIC for taxpayers, and the critical importance of Form 8867 due diligence for tax preparers, including common pitfalls and the implications of non-compliance.
• Compliance Issues: Understanding Form 8862 requirements for prior year disallowances, including lockout periods for reckless disregard or fraud, ensuring you can navigate complex client situations effectively.

This course equips you with the knowledge to accurately determine eligibility, calculate credits, and fulfill due diligence obligations, ensuring compliance and maximizing benefits for your clients.