Form 8862: Information To Claim Certain Credits After Disallowance (2017)

What Form 8862 Is For

Form 8862 is a special IRS recertification form that taxpayers must complete when they want to claim certain tax credits again after those credits were previously denied or reduced. Think of it as a ""second chance"" form that allows you to prove you're now eligible for credits you couldn't claim before.

For the 2017 tax year, Form 8862 applied to three major refundable tax credits: the Earned Income Credit (EIC), the Child Tax Credit (CTC) and Additional Child Tax Credit (ACTC), and the American Opportunity Tax Credit (AOTC). These credits can significantly reduce the amount of tax you owe or increase your refund, which is why the IRS requires extra documentation if you've had problems claiming them in the past.

The form serves as proof to the IRS that you now meet all the eligibility requirements for these credits. It requires you to provide detailed information about your qualifying children, living arrangements, income, and educational expenses—essentially demonstrating that whatever caused the previous disallowance has been resolved. According to the IRS, taxpayers must attach Form 8862 to their tax return alongside the regular credit forms (such as Schedule EIC, Schedule 8812, or Form 8863) when reclaiming these credits.

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

You must file Form 8862 when two conditions are met: first, the IRS previously reduced or disallowed your EIC, CTC/ACTC, or AOTC for any reason other than a simple math or clerical error; and second, you now want to claim that credit again and believe you meet all requirements.

However, there are important exceptions where you don't need to file Form 8862. You can skip this form if you already filed Form 8862 once, the IRS then allowed your credit, and the credit hasn't been disallowed again (except for math errors). You also don't need it if you're claiming the EIC without a qualifying child and the previous denial was only because a child you listed didn't qualify as your dependent.

For late or amended returns, the same rules apply. If you're filing an amended return using Form 1040-X to claim a previously disallowed credit, you must attach Form 8862 if the original disallowance wasn't due to a math error. The form must be completed for the tax year you're currently claiming, not the year the credit was disallowed.

Timing is crucial: the IRS implemented a delayed refund rule for returns claiming the EIC or ACTC, meaning refunds cannot be issued before February 15, even if you file earlier. This applies to the entire refund amount, not just the portion related to these credits.

Key Rules or Details for 2017

The 2017 version of Form 8862 included several critical rules that taxpayers needed to understand. First, there were ban periods that could prevent you from claiming credits entirely. If the IRS made a final determination that your previous credit claim involved reckless or intentional disregard of the rules, you were banned from claiming that credit for 2 years. If fraud was involved, the ban extended to 10 years. During these ban periods, you cannot file Form 8862 or claim the affected credits under any circumstances.

Second, taxpayer identification number requirements were strict. For the EIC, you must have a valid Social Security Number (SSN)—Individual Taxpayer Identification Numbers (ITINs) were not acceptable. For the CTC/ACTC and AOTC, you could use either an SSN or ITIN. These numbers had to be obtained by the tax return due date (including extensions). If you or your qualifying child didn't have the proper identification number by that deadline, you couldn't claim the credit even on an amended return filed after obtaining the number.

Third, qualifying child requirements varied by credit. For the EIC, a qualifying child had to be under age 19 (or under 24 if a full-time student) and younger than you, live with you in the United States for more than half the year (at least 183 days), and be your son, daughter, stepchild, foster child, or certain other relatives. For the CTC/ACTC, the child had to be under age 17 at year's end, a U.S. citizen or resident, and live with you for more than half the year. For the AOTC, the eligible student couldn't have completed the first four years of college, must have been enrolled at least half-time, and couldn't have claimed the credit for more than four years total.

Fourth, income and residency requirements applied. For the EIC without a qualifying child, both you and your spouse (if filing jointly) had to have your main home in the United States for at least 183 days, and you had to be at least age 25 but under age 65 at year-end.

Step-by-Step (High Level)

Step 1: Determine If You Need to File the Form

Step 1: Determine if you need to file the form. Check whether your credit was previously denied for reasons beyond a math error and whether you've already successfully recertified. Review any IRS letters you received about the previous disallowance.

Step 2: Gather Your Documentation

Step 2: Gather your documentation. Collect Social Security cards or ITINs, school records, medical records, housing documentation, and any other papers that prove your qualifying children lived with you. For the AOTC, gather Form 1098-T from educational institutions and tuition payment records.

Step 3: Complete Part I (All Filers)

Step 3: Complete Part I (All Filers). Enter the tax year you're filing for (2017 for 2017 returns) on line 1, and check the boxes for whichever credits you're claiming on line 2. This tells the IRS which sections you need to complete.

Step 4: Complete the Appropriate Credit Sections

Step 4: Complete the appropriate credit sections. If claiming the EIC with a qualifying child, complete Part II Section A, listing each child's name and documenting the number of days they lived with you. If claiming the EIC without a child, complete Part II Section B, documenting your age and U.S. residency. For the CTC/ACTC, complete Part III with information about each qualifying child. For the AOTC, complete Part IV with student eligibility information.

Step 5: Complete Part V If Necessary

Step 5: Complete Part V if necessary. If any qualifying child could potentially be claimed by another person, you must complete Part V to establish that you're the person entitled to claim the child under the tiebreaker rules (generally, the parent with whom the child lived longest or who had higher income).

Step 6: Attach Form 8862 to Your Tax Return

Step 6: Attach Form 8862 to your tax return. The form must be physically attached to Form 1040 along with all other required schedules and forms for the credits you're claiming (Schedule EIC, Schedule 8812, Form 8863, etc.). Mail your return if required—some situations mandate paper filing.

Common Mistakes and How to Avoid Them

Mistake #1: Filing Form 8862 When You Don’t Need To

Mistake #1: Filing Form 8862 when you don't need to. One of the most common errors is submitting Form 8862 unnecessarily, which delays processing. Carefully review the exceptions: if you previously filed Form 8862 and were recertified, you don't need to file it again unless there's been another disallowance.

Mistake #2: Not Including Form 8862 When Required

Mistake #2: Not including Form 8862 when required. According to IRS data, forgetting to attach Form 8862 after a prior disallowance is among the top three EITC processing errors. If you file your return without the form when it's required, the IRS will deny your credit claim and send you a notice. Always check your IRS correspondence to see if Form 8862 is mentioned.

Mistake #3: Incorrect Day Counts for Qualifying Children

Mistake #3: Incorrect day counts for qualifying children. Parents often miscalculate how many days a child lived with them, especially when custody arrangements are involved or when children stay with multiple relatives. Keep detailed records—school enrollment papers, medical records with addresses, and written logs can prove residency. Remember that temporary absences for vacation, school, medical care, or military service count as time lived with you.

Mistake #4: Filing During a Ban Period

Mistake #4: Filing during a ban period. If you're within a 2-year or 10-year ban period due to reckless disregard or fraud, filing Form 8862 won't help—your credit will be automatically denied. Review any IRS letters about previous denials to determine if a ban period applies.

Mistake #5: Missing or Incorrect Taxpayer Identification Numbers

Mistake #5: Missing or incorrect taxpayer identification numbers. Ensure every person you're claiming has a valid SSN, ITIN, or ATIN (for adoptions) by the return due date. Writing numbers incorrectly or using ITINs where SSNs are required (especially for EIC) will cause automatic denial.

Mistake #6: Not Completing All Required Parts of the Form

Mistake #6: Not completing all required parts of the form. Some taxpayers check boxes on line 2 but fail to complete the corresponding sections. If you check the EIC box, you must complete Part II; if you check CTC/ACTC, you must complete Part III; if you check AOTC, you must complete Part IV. Incomplete forms result in processing delays and credit denials.

Mistake #7: Claiming a Child Who Is Another Person’s Qualifying Child

Mistake #7: Claiming a child who is another person's qualifying child. When a child could qualify under multiple people's tax returns (such as divorced parents or multigenerational households), only one person can claim the child for each credit. Part V helps resolve this, but many taxpayers skip it or fill it out incorrectly. Use the tiebreaker rules: the parent wins over non-parents, and between two parents not filing jointly, the parent with whom the child lived longest (or who has higher income if time is equal) gets to claim the child.

What Happens After You File

After you submit your tax return with Form 8862 attached, the IRS will review your claim more carefully than a standard return. This enhanced scrutiny is why processing takes longer—the IRS verifies that you meet all eligibility requirements for the credits you're claiming.

Initial processing: Your return enters the IRS system and undergoes computer screening. For returns claiming the EIC or ACTC, remember that refunds are delayed until mid-February regardless of when you file. During this time, the IRS may compare your Form 8862 information against its databases and third-party records.

Potential outcomes: If everything checks out and the IRS determines you're eligible, your credit will be approved and your refund processed normally (subject to the February 15 delay for EIC/ACTC). You'll receive your refund via direct deposit or paper check according to your preference.

However, the IRS may send you a notice requesting additional documentation. Common requests include school records proving residency, birth certificates, medical records, or statements from landlords or schools. You typically have 30-45 days to respond. Gather everything requested, make copies for your records, and mail the documents to the address shown on the notice.

Math error notices: If you're within a ban period and shouldn't have filed Form 8862, you'll receive a math error notice disallowing the credit. You have 60 days from the notice date to contact the IRS and challenge this decision if you believe it's incorrect.

Audit possibilities: Because you're recertifying after a previous disallowance, your return faces a higher audit risk. If selected for audit, you'll receive a Letter 566 or similar correspondence with detailed instructions. An audit requires you to prove eligibility with documents like birth certificates, school enrollment records, lease agreements, medical records, and possibly affidavits from third parties. Respond promptly and completely.

Future returns: If your Form 8862 results in credit approval, you won't need to file Form 8862 again for that same credit—unless it's disallowed again in a future year. Keep copies of your approved Form 8862 and supporting documents for at least three years in case questions arise later.

FAQs

What credits does Form 8862 cover for 2017?

For tax year 2017, Form 8862 covered three types of credits: the Earned Income Credit (EIC), the Child Tax Credit and Additional Child Tax Credit (CTC/ACTC), and the American Opportunity Tax Credit (AOTC). You must file the form if any of these credits were previously reduced or disallowed and you want to claim them again.

Can I file Form 8862 electronically or must I mail it?

For most situations, you can file Form 8862 electronically using tax software as part of your e-filed return. However, if you're within a disallowance ban period and filing to challenge it, you'll need to file a paper return by mail. Check current IRS guidance or consult your tax software to determine if e-filing is available for your specific situation.

How long does it take to process a return with Form 8862?

Processing times for returns with Form 8862 are longer than standard returns because of additional IRS review. Typical processing takes 6-8 weeks, though it can extend to 12 weeks or more if the IRS requests additional documentation. Remember that EIC and ACTC refunds cannot be issued before mid-February regardless of processing speed.

What if I disagree with a previous credit denial?

If you believe the IRS incorrectly denied your credit, you typically have 60 days from the denial notice to file a protest or request appeals consideration. Form 8862 is for situations where you accept the previous denial and are now recertifying because your circumstances have changed or you can now prove eligibility.

Do I need Form 8862 if I'm claiming a different qualifying child?

It depends on why your previous credit was denied. If your EIC was denied only because a specific child didn't qualify as your qualifying child, and you're now claiming the EIC without any qualifying child, you don't need Form 8862. However, if you're claiming the EIC with a different child, or if any other credits were denied, you must file Form 8862.

What happens if I forget to attach Form 8862 to my return?

If Form 8862 was required but not attached, the IRS will deny your credit claim and send you a notice. You'll then need to respond to the notice and may need to file an amended return with Form 8862 attached. This significantly delays your refund and creates additional paperwork.

Can I get help completing Form 8862?

Yes. The IRS offers free tax preparation assistance through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs. You can also consult IRS Publication 596 (for EIC), Publication 972 (for CTC), and Publication 970 (for education credits) for detailed guidance. Professional tax preparers and certified public accountants can also assist, though they charge fees for their services.

Sources: All information in this summary is based on official IRS documents from IRS.gov, including Form 8862 (Rev. October 2017), Instructions for Form 8862 (Rev. October 2017), and IRS guidance on credit disallowances available at IRS.gov/Form8862 and IRS.gov credit disallowance guidance.