If the IRS has denied or reduced your tax credits in the past, Form 8862 is your pathway to reclaiming them. This form acts as your official "recertification" document, proving to the IRS that you now meet all the requirements to receive valuable tax credits like the Earned Income Credit (EIC), Child Tax Credit (CTC), Additional Child Tax Credit (ACTC), Credit for Other Dependents (ODC), or American Opportunity Tax Credit (AOTC). Understanding when and how to use this form can make the difference between receiving hundreds or even thousands of dollars in tax credits versus missing out entirely.

What Form 8862 Is For

Form 8862 serves a specific purpose: it's required when you want to claim certain tax credits again after the IRS previously denied or reduced them. Think of it as your second chance to prove eligibility. The form covers five major credits:

• Earned Income Credit (EIC) – A credit for working people with low to moderate income, worth up to $6,431 for families with three or more qualifying children in 2018.
• Child Tax Credit (CTC) and Additional Child Tax Credit (ACTC) – Credits worth up to $2,000 per qualifying child under age 17 who has a valid Social Security Number.
• Credit for Other Dependents (ODC) – A new credit in 2018 worth $500 for dependents who don't qualify for the CTC, such as older children or relatives.
• American Opportunity Tax Credit (AOTC) – An education credit worth up to $2,500 per eligible student for the first four years of college.

Form 8862 is only necessary if your credit was denied or reduced for substantive reasons—not for simple math or clerical errors. If the IRS found you made an arithmetic mistake, you don't need this form. However, if they determined you didn't meet eligibility requirements (wrong income, child didn't live with you, etc.), then Form 8862 becomes mandatory the next time you claim that credit.

The form essentially asks you to re-establish your eligibility by answering detailed questions about your qualifying children, income, residency, and other credit-specific requirements. It's the IRS's way of ensuring that previous mistakes or disqualifications have been corrected.

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

You must attach Form 8862 to your tax return if both of these conditions apply: (1) Your EIC, CTC/ACTC/ODC, or AOTC was previously reduced or disallowed for any reason other than a math or clerical error, and (2) You now want to claim the credit again and believe you meet all requirements.

Timing matters significantly. For the 2018 tax year, if your 2017 or any earlier credit was denied, you need Form 8862 when filing your 2018 return. You attach it to your regular tax return—whether filed on time or late. If you're filing an amended return using Form 1040-X to claim a credit that was previously disallowed, you must also include Form 8862.

Important Exceptions

You don't need Form 8862 if: you already filed it once and the IRS then allowed your credit (and it hasn't been denied again); you're claiming EIC without a qualifying child and the only reason for previous denial was that your claimed child didn't qualify; or you've received a CP74 notice from the IRS saying you've been recertified.

Ban Periods

Ban periods apply. You cannot file Form 8862 or claim these credits for 2 years if the IRS made a final determination that your previous claim involved "reckless or intentional disregard of the rules," or for 10 years if fraud was involved. These are serious penalties that extend beyond simple mistakes.

Filing Timing Notes

If you're filing close to the deadline and realize you need Form 8862, it's crucial to include it with your original filing. The IRS delayed refunds for EIC and ACTC claims—they cannot issue refunds before February 15 for returns claiming these credits, giving them time to verify eligibility and review Form 8862 submissions.

Key Rules or Details for 2018

The 2018 tax year brought significant changes that affect Form 8862 filers:

New SSN Requirement for Child Tax Credit

Starting in 2018, children must have a Social Security Number (SSN) valid for employment—issued before your return's due date—to qualify for the CTC or ACTC. Children with only an Individual Taxpayer Identification Number (ITIN) or Adoption Taxpayer Identification Number (ATIN) no longer qualify for these credits. However, they may qualify for the new $500 Credit for Other Dependents.

Form 1040 Redesign

Forms 1040A and 1040EZ were eliminated in 2018. Everyone now uses Form 1040, which means Form 8862 attaches to the redesigned Form 1040 regardless of income complexity.

Income Limits for 2018

• EIC: Maximum earned income of $49,194 ($54,884 if married filing jointly) with three or more qualifying children; $45,802 ($51,492 MFJ) with two children; $40,320 ($46,010 MFJ) with one child; $15,270 ($20,950 MFJ) with no qualifying children.
• Investment income limit: You cannot claim EIC if investment income exceeds $3,500.
• CTC/ACTC/ODC: Modified adjusted gross income (MAGI) phase-out begins at $200,000 ($400,000 MFJ).
• AOTC: MAGI phase-out begins at $80,000 ($160,000 MFJ).

Qualifying Child Requirements

Qualifying child requirements remained strict: Children must meet relationship tests (son, daughter, sibling, or descendant), age tests (under 19, or under 24 if a full-time student, or any age if permanently disabled), and residency tests (lived with you in the U.S. for more than half the year). For EIC, children must have lived with you for more than 183 days (184 in leap years).

Filing Status Restrictions

You cannot claim EIC if your filing status is "Married Filing Separately" unless special circumstances apply (like spousal abandonment qualifying you for Head of Household status).

Step-by-Step (High Level)

Step 1: Determine If You Need the Form

Check whether your credit was previously denied for substantive (non-math) reasons and whether you fall within a ban period. Review any IRS notices from previous years.

Step 2: Complete Part I (All Filers)

Enter the tax year you're filing for (2018) on line 1. Check the box(es) on line 2 for each credit you're claiming: EIC, CTC/ACTC/ODC, and/or AOTC. You can claim multiple credits on one form.

Step 3: Complete Part II If Claiming EIC

Answer question 3 about whether your only error was incorrectly reported income. If yes, you're done with this section. If no, answer question 4 about whether you could be claimed as someone else's qualifying child. If claiming EIC with a qualifying child, complete Section A—listing each child's name, days lived with you (must exceed 183), and birth/death dates if applicable. If claiming EIC without a qualifying child, complete Section B—documenting days your main home was in the U.S. (must exceed 183) and confirming you meet age requirements (25-64).

Step 4: Complete Part III If Claiming CTC/ACTC/ODC

List each qualifying child (up to four on the form; attach statements for more) and each other dependent. Answer yes/no questions for each person about: whether the child lived with you more than half the year, whether they meet qualifying child requirements, whether they're your dependent, and whether they're a U.S. citizen, national, or resident alien.

Step 5: Complete Part IV If Claiming AOTC

List each student (up to three on the form). Confirm each student met eligibility requirements—enrolled at least half-time in a degree program, had not completed the first four years of college, had not claimed AOTC for four previous years, and had no felony drug conviction.

Step 6: Complete Part V If Applicable

This section applies only if your qualifying child could be claimed by someone else (other than your spouse). You must list addresses where you lived with the child and identify other people who lived with the child. The IRS uses tiebreaker rules to determine who gets to claim the child.

Step 7: Attach Form 8862 to Your Tax Return

The form goes in the attachment sequence (43A) with your Form 1040 and required schedules (Schedule EIC for EIC, Form 8863 for AOTC, etc.). File your complete return by the deadline or request an extension.

Common Mistakes and How to Avoid Them

Mistake #1: Forgetting to File Form 8862

If you were required to file Form 8862 but didn't, the IRS will send a math error notice disallowing your credit. Your return will be processed, but without the credit. Solution: Keep careful records of IRS correspondence. If you receive a notice about credit denial, make a note that Form 8862 is required next year. Set a reminder when preparing your return.

Mistake #2: Incorrect Social Security Numbers

Name and SSN mismatches with Social Security Administration records trigger automatic rejections. For 2018, children must have SSNs (not ITINs) to qualify for CTC/ACTC. Solution: Verify all SSNs against Social Security cards before filing. If there's a mismatch, contact the Social Security Administration to correct their records before filing your return. Allow several weeks for corrections to update in IRS systems.

Mistake #3: Undercounting Days of Residency

Many filers miscalculate the number of days a child lived with them, falling below the required 183-day threshold. Temporary absences for school, vacation, medical care, or military service count as time lived with you. Solution: Use a calendar to track actual days. If your child was born or died during 2018, you can enter 365 days if they lived with you for more than half their life. Document absences and whether they qualify as temporary.

Mistake #4: Filing During a Ban Period

Attempting to claim credits during a 2-year or 10-year ban results in automatic denial and may trigger additional penalties. Solution: Carefully read any IRS determination letters from previous audits. They'll state if you're banned and for how long. Mark your calendar for when eligibility returns.

Mistake #5: Not Understanding Tiebreaker Rules

When multiple people can claim the same child, only one person may actually claim them. If two returns claim the same child, the IRS will investigate. Solution: Complete Part V honestly and thoroughly if anyone else could claim your child. Communicate with the other potential claimant before filing. Understand that parents get priority over non-parents, custodial parents get priority over non-custodial parents, and if two non-parents claim the child, the person with highest AGI prevails.

Mistake #6: Incorrect Credit Combinations

Claiming credits you're not eligible for or mixing incompatible filing statuses (like Married Filing Separately with EIC) wastes time and delays refunds. Solution: Read instructions carefully for each credit's specific requirements and verify your filing status is compatible with the credits you're claiming.

Mistake #7: Missing Required Attachments

Form 8862 requires accompanying schedules—Schedule EIC for earned income credit claims, Form 8863 for AOTC. Solution: Carefully review the Form 8862 instructions for required attachments and include all necessary documentation with your return.

What Happens After You File

Once you submit your tax return with Form 8862 attached, the IRS review process begins:

Processing Timeline

For 2018 returns claiming EIC or ACTC, the IRS cannot issue refunds before February 15. This is a statutory requirement designed to prevent fraud. Your refund may take several additional weeks beyond this date if Form 8862 requires extra review.

Potential Requests for Documentation

The IRS may contact you requesting proof of eligibility. Common documentation requests include: birth certificates or adoption papers proving relationship to qualifying children; school records, medical records, or landlord statements showing the child's address matched yours; childcare provider statements; or Social Security Administration records. Respond promptly—usually within 30 days—to avoid further delays or denial.

Possible Outcomes

1. Credit allowed: If the IRS determines you meet all requirements, they'll process your refund including the claimed credits. You may receive a CP74 notice stating you've been successfully recertified—save this notice, as it means you don't need Form 8862 next year unless credits are denied again.
2. Credit denied: If eligibility issues remain, the IRS will deny the credit and send a notice explaining why. You have rights to appeal through the IRS Independent Office of Appeals within the timeframe specified in the notice.
3. Additional review or audit: In some cases, the IRS may initiate a full examination of your return. You'll receive a notice requesting an interview or more extensive documentation. Take these seriously—failure to cooperate can result in credit denial and potential penalties.

Future Implications

Successfully filing Form 8862 and having your credit allowed removes the requirement to file it again in future years—unless your credits are reduced or denied again for substantive reasons. However, you must continue meeting all eligibility requirements each year. The IRS maintains records of previous denials and may scrutinize your returns more carefully in subsequent years.

Penalties to Be Aware Of

If you claim credits fraudulently or with reckless disregard for the rules, you face: immediate credit denial; repayment of incorrectly received credits plus interest; potential 2-year or 10-year ban from claiming credits; a 20% penalty on the erroneous claim amount; and possible criminal prosecution in severe fraud cases.

FAQs

1. Do I need Form 8862 if my only mistake was a simple math error?

No. Form 8862 is only required when your credit was reduced or disallowed for substantive reasons—like failing to meet qualifying child requirements, income limits, or residency rules. Math or clerical errors don't trigger the Form 8862 requirement. The IRS will correct math errors and send you a notice, but you can claim the credit next year without Form 8862.

2. Can I file Form 8862 electronically, or must it be paper-filed?

Form 8862 can be filed electronically as part of your e-filed tax return. Electronic filing is actually preferable because it reduces processing time and errors. However, if your return is rejected due to duplicate qualifying child claims, you may need to file a paper return with Form 8862 attached.

3. What if I didn't know I needed Form 8862 and already filed my 2018 return without it?

If you filed without Form 8862 when it was required, the IRS will send you a math error notice disallowing the credit. When you receive this notice, you have two options: (1) Send Form 8862 to the IRS within the timeframe specified in the notice (usually 60 days)—the IRS will then review it and may allow your credit, or (2) File an amended return (Form 1040-X) with Form 8862 attached. Don't ignore the notice—respond promptly to preserve your rights.

4. My child has an ITIN, not an SSN. Can I still claim the Child Tax Credit with Form 8862?

No. Starting in 2018, children must have Social Security Numbers valid for employment to qualify for the Child Tax Credit or Additional Child Tax Credit. If your child only has an ITIN or ATIN, they cannot be claimed for CTC/ACTC. However, you may be able to claim the $500 Credit for Other Dependents for that child—dependents with ITINs or ATINs can qualify for ODC. If you were previously denied CTC and now want to claim ODC, you'd need Form 8862 for the ODC portion.

5. Can I use the previous year's earned income if my 2018 income was lower?

Yes, under certain disaster relief provisions. The Taxpayer Certainty and Disaster Tax Relief Act of 2019 allowed taxpayers affected by federally declared disasters to elect to use 2017 earned income to calculate their 2018 EIC if their 2017 income was higher. To make this election, write "PYEI" and your 2017 earned income amount next to line 17a on Form 1040. This doesn't change your Form 8862 requirements but may increase your credit amount.

6. What are the tiebreaker rules if someone else could claim my qualifying child?

The IRS applies tiebreaker rules in this order: (1) If only one person is the child's parent, the parent wins. (2) If both parents file jointly, they can claim the child. (3) If parents file separately and both claim the child, the parent with whom the child lived longer during the year wins; if equal time, the parent with higher AGI wins. (4) If no parent claims the child but multiple non-parents could, the person with the highest AGI wins—but only if their AGI exceeds the parent's AGI. You must complete Part V of Form 8862 honestly if these situations apply.

7. Will filing Form 8862 guarantee I get my credit, or could I still be audited?

Filing Form 8862 doesn't guarantee credit approval—it's simply your attestation that you now meet requirements. The IRS may review your return more carefully, request supporting documentation, or select your return for audit. However, if you truthfully complete the form and genuinely meet all eligibility requirements, you should receive your credit. Be prepared to substantiate your claims with records: keep birth certificates, school records, medical records, and residence documentation for at least three years. The IRS has three years from your filing date to audit, though this extends to six years in cases of substantial underreporting.

Additional Resources

• Form 8862 (Rev. November 2018)
• Instructions for Form 8862 (Rev. November 2018)
• Publication 596 (2018) - Earned Income Credit
• IRS: What to do if we deny your claim for a credit
• IRS: Handling processing errors