Form 8862: Information To Claim Certain Credits After Disallowance (2015)

What Form 8862 Is For

Form 8862, ""Information To Claim Certain Credits After Disallowance,"" is essentially your second chance application when the IRS has previously denied or reduced valuable tax credits on your return. Think of it as a recertification form that tells the IRS, ""I understand why my credit was denied before, but I now meet all the requirements and want to claim it again.""

For the 2015 tax year, Form 8862 applied primarily to the Earned Income Credit (EIC), though the form has since expanded to cover additional credits in later years. The EIC is one of the most significant refundable credits available to working individuals and families with low to moderate income, potentially worth thousands of dollars. When the IRS disallows this credit due to errors or eligibility issues (not simple math mistakes), they require you to prove your eligibility by completing Form 8862 before they'll allow you to claim it again.

The form serves a dual purpose: it helps the IRS verify that you now understand and meet all eligibility requirements, and it provides a structured way for you to document your qualifications. Without this form attached to your return, the IRS will automatically reject your credit claim—no exceptions, no second chances for that tax year.

When You'd Use Form 8862 (Late/Amended Returns)

You must file Form 8862 attached to your tax return when your EIC for any year after 1996 was denied or reduced for reasons other than a math or clerical error, and you now want to claim the credit again. The timing of when you need to file this form depends on several factors, including when the IRS made their determination and when you're eligible to claim the credit again.

For original returns: If your EIC was disallowed in a previous year and you're now filing your 2015 return claiming the EIC, you must attach Form 8862 to that 2015 return. The form must be filed with your original return—you cannot claim the EIC first and then submit Form 8862 later.

For amended returns: If you didn't have a valid Social Security Number by the due date of your 2015 return (including extensions) and later obtained one, you cannot file an amended return to claim the EIC, even with Form 8862. The SSN requirement is absolute and must be met by the original filing deadline.

Important exception for late filing: If the IRS disallowed your credit and the determination became final before you filed your 2015 return, you must include Form 8862 with that return. However, if you filed your 2015 return before the IRS made a final determination about a previous year's credit, you wouldn't need Form 8862 for the 2015 return (though you might need it for a subsequent year).

The ""late or amended"" aspect is particularly strict with Form 8862: if you're required to file it and don't, your credit claim will be automatically denied as a math error, and you won't be permitted to claim the credit without it. This makes timing and awareness of the requirement absolutely critical.

Key Rules for 2015

Several important rules governed Form 8862 usage for the 2015 tax year, and understanding them is essential to successfully reclaiming your credit:

The Basic Requirement: You must file Form 8862 if your EIC for any year after 1996 was denied or reduced for any reason except a math or clerical error. Math errors include things like calculation mistakes or incorrect Social Security Numbers—essentially mechanical errors that don't involve your actual eligibility for the credit.

The Waiting Period (Ban Period): This is perhaps the most critical rule. If the IRS determined that your incorrect EIC claim was due to ""reckless or intentional disregard"" of the rules, you're completely barred from claiming the EIC for the next two years. If the determination was fraud, the ban period extends to ten years. During these ban periods, you cannot claim the EIC at all, and filing Form 8862 won't help. Once the ban period ends, you must file Form 8862 to recertify your eligibility.

Exceptions Where You Don't Need Form 8862: You don't need to file Form 8862 if you previously filed it after a disallowance, your credit was then allowed, and it hasn't been disallowed again. Additionally, if you're claiming the EIC without a qualifying child for 2015, and your prior disallowance was only because the IRS determined your listed child wasn't actually your qualifying child, you don't need the form.

Social Security Number Requirements: For 2015, both you and your spouse (if filing jointly) must have had valid SSNs issued by the Social Security Administration by the due date of your 2015 return, including extensions. If you didn't have a valid SSN by that deadline, you cannot claim the EIC on your 2015 return—period. You cannot file Form 8862 later or amend your return to add the credit once you get an SSN.

Automatic Denial Without the Form: If Form 8862 is required and you file your return claiming the EIC without it attached, the IRS will automatically deny your credit claim. This is treated as a math error, meaning the IRS will simply reject the credit without further review.

Step-by-Step (High Level)

Filing Form 8862 follows a logical progression that requires careful attention to detail. Here's how the process works at a high level:

Step 1: Determine If You Need the Form

Review any IRS notices from previous years about denied or reduced EIC claims. If your EIC was disallowed for reasons other than math errors, and you're not currently in a ban period, you'll need Form 8862. Check whether any exceptions apply to your situation—if they do, you can skip the form.

Step 2: Verify Your Eligibility for the Credit

Before completing Form 8862, make absolutely certain you now meet ALL requirements for the EIC. This includes having earned income, meeting income limits, having valid SSNs, being a U.S. citizen or resident alien all year, and not filing Form 2555 or 2555-EZ. If you're claiming the EIC with a qualifying child, verify that child meets all four tests: relationship, age, residency, and joint return requirements.

Step 3: Complete Form 8862

The form asks for specific information about your qualifying children (if any) and requires you to certify that you meet all eligibility requirements. You'll need to provide details demonstrating that you've corrected whatever caused the previous disallowance.

Step 4: Attach Form 8862 to Your Tax Return

Form 8862 must be physically attached to your Form 1040, 1040A, or 1040EZ when you file. If you're e-filing, the tax software will attach it electronically. Do not file Form 8862 separately—it only works when attached to a complete tax return claiming the EIC.

Step 5: File Your Complete Return

Submit your tax return with the attached Form 8862 by the filing deadline (or by the extended deadline if you filed for an extension). Make sure you've also completed Schedule EIC if you have qualifying children, as Form 8862 doesn't replace that schedule.

Step 6: Respond to Any IRS Requests

The IRS may request additional documentation to verify your eligibility before releasing your refund. Common requests include birth certificates, school records, medical records, or other documents proving relationship, residency, or age requirements for qualifying children. Respond promptly and completely to avoid delays.

Common Mistakes and How to Avoid Them

Understanding where other taxpayers go wrong can help you avoid similar pitfalls when filing Form 8862:

Mistake #1: Filing Form 8862 During a Ban Period. Many taxpayers don't realize they're subject to a two-year or ten-year ban and file Form 8862 before the ban period ends. The IRS will automatically reject your credit claim if you're still in a ban period, regardless of whether you meet all other requirements. How to avoid it: Carefully calculate the ban period based on the date of the IRS's final determination, and wait until the ban has fully expired before attempting to claim the credit again.

Mistake #2: Forgetting to Attach Form 8862. Some taxpayers complete the form but fail to attach it to their return, or they claim the EIC without realizing Form 8862 is required. How to avoid it: If you've had any EIC disallowance in previous years, always check whether Form 8862 is required before claiming the credit. Review your tax return one final time before filing to ensure the form is attached.

Mistake #3: Still Not Meeting Eligibility Requirements. Filing Form 8862 doesn't automatically entitle you to the credit—you must actually meet ALL eligibility requirements. Many taxpayers file the form while still failing basic requirements like the qualifying child tests or income limits. How to avoid it: Use the IRS's EITC Assistant tool at IRS.gov to verify your eligibility before filing. Double-check every requirement carefully, especially if your situation is complex.

Mistake #4: Providing Incomplete Information. Form 8862 requires specific details about your qualifying children and living situation. Vague or incomplete answers can trigger additional IRS scrutiny and delay your refund. How to avoid it: Gather all necessary documents before starting the form—birth certificates, school records, and proof of residence. Provide complete, accurate information for every question.

Mistake #5: Not Keeping Documentation. Even after filing Form 8862, you may need to prove your eligibility. Many taxpayers discard important documents or never gather them in the first place. How to avoid it: Maintain organized records including proof of each child's relationship to you, their age, their residence with you for more than half the year, and your income documents. Keep these records for at least three years after filing.

Mistake #6: Missing the SSN Deadline. Some taxpayers think they can get their SSN after filing and then amend their return. For 2015, this doesn't work—you must have the SSN by the original filing deadline (including extensions). How to avoid it: Apply for SSNs for yourself, your spouse, and any qualifying children well before tax time. If you're approaching the deadline without an SSN, file for an automatic extension to give yourself more time.

What Happens After You File

Once you've filed your return with Form 8862 attached, several things happen during the IRS processing period:

Initial Processing: The IRS will first check that Form 8862 is properly attached and that you're not currently in a ban period. If the form is missing when required, you'll receive a math error notice automatically denying your EIC claim. At this point, you cannot claim the credit without filing Form 8862 with your return.

Eligibility Review: Because you're recertifying your eligibility after a previous disallowance, the IRS conducts a more thorough review than for typical EIC claims. This additional scrutiny is standard procedure and happens to everyone filing Form 8862—it doesn't mean the IRS suspects fraud or has specific concerns about your return.

Documentation Requests: In many cases, the IRS will send you a request for additional documentation before processing your credit. They may ask for birth certificates, school records, medical records, lease agreements, or utility bills to verify qualifying child requirements. These requests are common and don't indicate a problem—they're part of the standard verification process for Form 8862 filers.

Potential Refund Delays: While filing Form 8862 itself shouldn't significantly delay your refund according to IRS guidance, the additional review process means your return may take longer to process than returns without Form 8862. Most taxpayers receive refunds within 21 days, but Form 8862 filers should allow additional time, especially if the IRS requests documentation.

Notice CP74 (Success): If the IRS approves your recertification, you'll receive Notice CP74 confirming that you've successfully demonstrated your eligibility and your credit has been allowed. This is good news—it means you've been recertified and won't need to file Form 8862 in future years unless your credit is disallowed again.

Alternative Outcomes: If the IRS determines you still don't meet the requirements, they'll deny your credit claim and send you a notice explaining why. You'll have appeal rights if you disagree with their determination. Depending on the reason for denial, you may face a new ban period preventing future EIC claims.

Future Tax Years: If your Form 8862 is successful and your credit is allowed, you don't need to file Form 8862 again in future years—unless your credit is disallowed again for a reason other than math or clerical error. Keep copies of your approved Form 8862 and Notice CP74 with your tax records as evidence of your successful recertification.

FAQs

Can I e-file my return with Form 8862, or must I paper file?

Yes, you can e-file your return with Form 8862 attached. Most tax preparation software will automatically generate and attach Form 8862 electronically when it's required. E-filing is actually recommended as it reduces processing time and minimizes errors.

What if I had a child disallowed previously but I'm claiming the EIC without any qualifying children this year?

You generally don't need to file Form 8862 in this situation. If your only previous disallowance was because the IRS determined a child wasn't your qualifying child, and you're now claiming the EIC without a qualifying child, the exception applies and you can skip Form 8862.

How do I know if I'm still in a ban period from a previous disallowance?

Check any IRS notices about your previous EIC disallowance—they should state whether you're subject to a ban and for how long. Count from the date of the IRS's final determination (not the date you received the notice or the tax year in question). If you're unsure, call the IRS or consult a tax professional before filing.

What happens if I claim the EIC without Form 8862 when I should have included it?

The IRS will automatically deny your EIC claim and send you a math error notice. You won't be able to dispute this denial because you didn't follow the proper procedure. You'll need to file Form 8862 with next year's return to try claiming the credit again—essentially losing a full year of eligibility.

If my spouse had a previous EIC disallowance but I didn't, do we still need Form 8862 when filing jointly?

Yes, if either spouse had an EIC disallowance in a previous year, you must file Form 8862 when filing jointly and claiming the EIC. The disallowance follows the individual, so it affects any return on which that person claims the EIC, regardless of filing status or whether they're filing with a different spouse.

What if I didn't receive any notice about a previous EIC disallowance but my refund was reduced?

Check your IRS transcript or account to determine why your refund was reduced. If the EIC was disallowed for reasons other than math errors, you'll need Form 8862 to claim it again. Even without receiving a physical notice, the disallowance still counts and triggers the Form 8862 requirement.

Do I need to file Form 8862 every year after a disallowance?

No—you only file Form 8862 once, for the first tax year you claim the EIC after the disallowance (and after any ban period ends). If that recertification is successful and your EIC is allowed, you don't file Form 8862 again unless you experience another disallowance in the future.

This summary is based on official IRS guidance for tax year 2015. Tax laws and forms are subject to change. For the most current information, visit IRS.gov.