Form 1040A Schedule 8812: Child Tax Credit (2016)

What Form 1040A Schedule 8812 Is For

Schedule 8812 for the 2016 tax year serves two distinct purposes depending on which parts you complete. Part I helps document that children identified with an Individual Taxpayer Identification Number (ITIN) meet the residency requirements to qualify for the child tax credit. Parts II through IV help you calculate the Additional Child Tax Credit—a refundable credit that can put money in your pocket even if you don't owe any taxes. This additional credit is the refundable portion of the child tax credit that becomes available when your regular child tax credit exceeds your tax liability or when you meet certain earned income requirements.

The child tax credit itself provides up to $1,000 per qualifying child under age 17, directly reducing the taxes you owe. When your credit amount is larger than your tax bill, or when you have sufficient earned income with three or more qualifying children, Schedule 8812 helps you claim the excess as a refund through the Additional Child Tax Credit. Think of it as the IRS giving you credit for raising children even when your regular tax bill doesn't fully absorb the benefit.

When You’d Use This Schedule (Late or Amended Returns)

You must have valid taxpayer identification numbers for yourself and each qualifying child by your return's original due date, including extensions, to claim either the child tax credit or additional child tax credit. If you file your 2016 return late but before the deadline, you can still claim these credits as long as you and your children had Social Security Numbers (SSNs), ITINs, or Adoption Taxpayer Identification Numbers (ATINs) by the due date. If you're amending your 2016 return, the same rule applies—the identification numbers must have existed by the original deadline, even if you later get the numbers, you cannot claim these credits on an amended return if the numbers weren't issued in time.

Exception for ITIN/ATIN Applications

If you applied for an ITIN or ATIN on or before your return's due date and the IRS issued the number as a result of that application, the IRS considers the number issued on time.

Amending for Other Errors

For amended returns that correct other errors, you can include Schedule 8812 if you originally qualified but failed to claim the credit. However, be aware that improper claims carry serious consequences. Reckless or intentional disregard of the rules results in a two-year ban from claiming these credits, while fraudulent claims trigger a ten-year ban.

Key Rules and Requirements

To claim any amount through Schedule 8812, your child must first be a qualifying child for the regular child tax credit. This means the child must be your son, daughter, stepchild, foster child, sibling, or descendant of any of these (like a grandchild or niece), under age 17 at year-end, claimed as your dependent, lived with you for more than half the year, didn't provide over half their own support, and is a U.S. citizen, national, or resident alien.

Additional Requirement for ITIN Children

Children identified by ITINs must additionally meet the substantial presence test, requiring physical presence:

• At least 31 days during 2016, and
• 183 days during the three-year period 2014-2016 (counting all 2016 days, one-third of 2015 days, and one-sixth of 2014 days)

When the Additional Child Tax Credit Applies

The Additional Child Tax Credit becomes available when:

• Your regular child tax credit exceeds your tax liability, or
• You have three or more qualifying children and meet certain tax/benefit thresholds

Earned income includes wages, salaries, tips, and nontaxable combat pay, but excludes investment income, Social Security benefits, and other unearned income.
If you use the foreign earned income exclusion (Form 2555/2555-EZ), you cannot claim the Additional Child Tax Credit.

Income Phase-Out Levels

Your credit begins to phase out if your modified adjusted gross income exceeds:

• $110,000 Married filing jointly
• $75,000 Single or head of household
• $55,000 Married filing separately

Your credit is reduced by $50 for each $1,000 (or fraction thereof) above the threshold.

Step-by-Step (High Level)

Step 1: Determine Whether You Need Schedule 8812

If all your children have SSNs/ATINs and your tax liability absorbs the full child tax credit, you do not need Schedule 8812.
Use the Child Tax Credit Worksheet in the 1040A instructions to confirm.

Step 2: Complete Part I (For ITIN Children Only)

If you have ITIN-identified children, answer the substantial presence question for each child.
This requires counting U.S. presence days for 2014-2016 and applying the IRS day-weighting rules.

Step 3: Start Parts II–IV for the Additional Child Tax Credit

• Enter your unused child tax credit from the worksheet
• Calculate your earned income
• If earned income exceeds $3,000, subtract $3,000 and multiply the remainder by 15%
• This gives one possible Additional Child Tax Credit amount

Step 4: Complete Part III (Required Only for 3+ Children)

If you have three or more qualifying children, compare:

• Excess Social Security & Medicare taxes
  vs.
• Refundable credits received

This may produce a larger refundable credit than the earned-income calculation.

Step 5: Determine Your Final Additional Child Tax Credit

Your Additional Child Tax Credit is:

• The smaller of the Part II amount or your unused child tax credit,
  unless
• You have 3+ children, and Part III produces a larger amount

Common Mistakes and How to Avoid Them

Misunderstanding Age Requirements

Children must be under 17 on December 31, 2016.
A child who turned 17 any day in 2016 does not qualify.

Incorrect Eligibility Claims for ITIN Children

Verify that ITIN children meet the substantial presence test before checking the qualifying-child box in Form 1040A column 4.

Earned Income Calculation Errors

Do not include:

• Interest
• Dividends
• Social Security
• Unemployment compensation
• Other unearned income

Only wages, tips, self-employment income, and nontaxable combat pay count.

Forgetting Excess Social Security/RRTA Taxes

If you have three or more children, failing to include excess Social Security and tier-1 RRTA taxes can reduce your credit incorrectly.

Refund Timing Errors

Refunds cannot be issued before February 15, 2017 for returns claiming the ACTC—even if filed early.

Foreign Earned Income Exclusion Mistake

If you file Form 2555/2555-EZ, you are not eligible for the Additional Child Tax Credit.

What Happens After You File

Refund Timing

The IRS cannot issue refunds for ACTC-claimed returns before February 15, even if filed in January. You can check status using the “Where’s My Refund?” tool beginning on February 15.

Verification Requirements

The IRS may request proof of U.S. residency for ITIN-identified children, such as:

• School records
• Medical records
• Residency documents

Consequences for Improper Claims

If you improperly claim the credit:

• You must repay the credit plus interest
• Reckless claims = 2-year ban
• Fraudulent claims = 10-year ban

Refund Treatment for Benefit Programs

The Additional Child Tax Credit does not count as income for:

• TANF
• Medicaid
• SSI
• SNAP

Your refund is also excluded as a financial resource for 12 months.

FAQs

My child has an ITIN but lived in the U.S. all year—do I still need Part I?

Yes. All ITIN-identified children must have Part I completed.

Can I claim the Additional Child Tax Credit if I owe no taxes?

Yes—this credit is refundable and payable even with zero tax liability, as long as you meet earned-income or 3-child requirements.

How does nontaxable combat pay affect the credit?

You may choose to include it in earned income. It often increases the credit.

Does a child who turns 17 in 2016 still qualify?

Only if they were still 16 on December 31, 2016.
If they turned 17 at any point in 2016, they do not qualify.

Can separated parents both claim the same child?

No. Only one parent can claim the child tax credit.
Custodial parents generally have priority unless Form 8332 is used.

How do I report more than four ITIN children in Part I?

Use a second Schedule 8812 and relabel the lines (E-H).
Attach all copies.

If I don’t receive my refund by February 15, is something wrong?

Not necessarily. February 15 is simply the earliest the IRS can begin issuing these refunds.
Use “Where’s My Refund?” for accurate status updates.

Sources: IRS Schedule 8812 Instructions (2016), IRS Schedule 8812 Form (2016), IRS Publication 972 (2016)

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