Know the questions to ask to help your client's get the most out of education and child-related tax benefits. And, ask each client all the questions every year. Family dynamics change and just because they qualified last year, doesn't mean they will this year. Or, things could have changed and this year they qualify. So don't miss any tax savings or refundable credits for your client.
- Ask for the child's date of birth or verify it if you use a client intake sheet.
- If over 19, ask how many months the child was in school. Remember, the 5 months don't have to be consecutive.
- Verify the relationship. If not the parent, ask where the parents are and why the parents are not claiming. Explain the tie breaker rules when necessary.
- Ask how long the child lived in the same home as your client. Did anyone else live in the same home? Did the child live with anyone else for part of the year? Explain the tie breaker rules when necessary.
- Verify Social Security numbers, ATINs and ITINs.
Permanently and Totally Disabled
IRS defines permanently and totally disabled as:
- Not being able to engage in any substantial gainful activity because of a medically determinable physical or mental condition; and
- A physician must certify the condition has lasted or is expected to last continuously for at least 12 months or result in death.
- To prove permanent and total disability, IRS asks for a letter from the child's doctor, other healthcare provider or any social service program or government agency verifying the child is permanently and totally disabled. If your client doesn't have this document, ask your client if they can get this letter if IRS asks.
- I have your W-2 from x employer or xx employers, do you have any other income such as interest, dividends or from running your own business that we haven't talked about?
- See our EITC Schedule C and Record Reconstruction Training for interview tips for self-employment income and for help on reconstructing business records
- Don't assume the child is not married: regardless of age, always ask. Are any of your children married? I don't think so, but I have to ask if your child is married or not.
- Don't let your client tell you his or filing status: ask the right questions. Are you married? When did you separate? Was it a legal separation or divorce? When did your spouse move out? See our tips for handling the common error, married taxpayers who incorrectly file as single or head of household for more tips
- It must be hard to support a family of x amount on this amount of income. Did anyone else help support this child? Did you receive help from any government agency or social organization? Or, did you receive outside support for this child? Or, did your child work or provide any of his or her own support?
- Verify the student can claim his or her own personal exemption or that the person claiming the student can. It is difficult to verify if dependent students filed their own returns and claimed their personal exemption. But, warn your clients when they are not sure if someone else claimed the exemption of the possible consequences.
- Ask how long the student attended a post-secondary school. Ask how many courses the student is taking? Ask what the school considers full-time. Verify the school term. Ask the student's enrollment status, undergraduate or graduate. If the student is taking graduate studies, ask when he or she started graduate studies.
- Ask enough questions until you feel comfortable the student qualifies and let your clients know if the IRS audits them, they need to have documents supporting their claim. See the Form 866-H-AOC (also available in Spanish, Form 886-H-AOC- SP) and 866-H-AOC-MAX for examples of the documentation needed.
If your client's claims EITC, you may need to keep copies, either paper or scanned versions, of. any documents your clients provide such as social security cards, birth certificates, school records, business income and expense records and more. If you on any documents your clients bring in such as social security cards, birth certificates, school records, business income and expense records and more. you rely on them to find out if they are eligible for EITC or calculate the amount of the credit, you need to keep a copy of the document to meet your EITC due diligence.
More Tips for Interviews
- We provide good interview tips on our EITC pages. See our Handling the Most Common Due Diligence Situations or watch our award winning Due Diligence videos for some good and some bad interview techniques.
- Check out the Frequently Asked Questions for EITC and American Opportunity Credit Questions and Answers or more tips.
More Refundable Credit Resources
- Find the latest news for refundable credits on What's Hot?
Find out the qualifications for Education Credits
See the AOTC, the LLC and the Tuition Deduction criteria side by side on our Compare Education Credits and Tuition and Fees Deduction chart
- Whether you are involved in education, interact with students or parents of students or are a tax return preparer, find out What You Need to Know about AOTC and LLC
- Whether you are a social or civic organization, a government office or agency, a county or municipal agency or a tax return preparer, find out What You Need to Know about CTC and ACTC
What other resources do we have for you? Check out the EITC Central and Other Refundable Credits