Form 8862: Information To Claim Certain Credits After Disallowance (2024)

What Form 8862 Is For

Form 8862 is your ""second chance"" form with the IRS. If you've previously claimed certain valuable tax credits—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)—and the IRS reduced or completely disallowed your claim, you'll need Form 8862 to claim those credits again in the future.

Think of it as a recertification process. When the IRS denies one of these credits (not due to a simple math mistake), they want you to prove you're now eligible before they'll let you claim it again. The form asks detailed questions about your current situation to demonstrate you genuinely qualify this time around. It's essentially the IRS saying, ""Show us you meet all the requirements now, and we'll consider your claim.""

The form covers five major tax credits that together can save families thousands of dollars. The Earned Income Credit alone can be worth up to several thousand dollars for working families with children. These credits are frequently claimed incorrectly—sometimes innocently, sometimes fraudulently—so the IRS uses Form 8862 as a gatekeeper to ensure only eligible taxpayers receive them after a previous denial.

When You'd Use It (Late/Amended Returns)

You must attach Form 8862 to your tax return if two conditions apply: (1) the IRS reduced or denied your credit claim in a previous year for any reason other than a math or clerical error, and (2) you now want to claim that credit again and believe you meet all eligibility requirements.

You don't need Form 8862 if:

• You already filed Form 8862 once before, the IRS accepted it and allowed your credit, and you haven't had another denial since (except for math errors)
• You're claiming the Earned Income Credit without a qualifying child, and the only reason it was previously denied was because the IRS determined a child you listed wasn't actually your qualifying child
• You received a CP74 notice from the IRS stating they've ""recertified"" you

Critical exception: Don't file Form 8862 during ban periods. If the IRS made a final determination that your credit claim was due to ""reckless or intentional disregard"" of the rules, you cannot claim the credit for 2 years after that determination. If fraud was involved, the ban extends to 10 years. During these periods, you're prohibited from claiming the credits regardless of whether you file Form 8862.

The form applies to both original and amended returns. If you're filing a late return for 2024 or amending a 2024 return to claim one of these credits, and you had a previous disallowance, you'll need to include Form 8862. The key date that matters is when your credit was originally denied, not when you're currently filing.

Key Rules for 2024

Several important requirements apply when using Form 8862 for tax year 2024:

Social Security Number Timing: You must have a valid Social Security Number (SSN) issued on or before the tax return due date (including extensions) to claim the Earned Income Credit. For the Child Tax Credit and related credits, your qualifying children need valid SSNs issued by the due date. Individual Taxpayer Identification Numbers (ITINs) work for some credits but not the EIC—you must have an SSN for that one.

Age Requirements: For taxpayers claiming the Earned Income Credit without a qualifying child, you must be at least 25 years old but under 65 at the end of 2024. For the Child Tax Credit, qualifying children must be under age 17 at the end of 2024 (note: this was age 18 for 2021 only).

Residency Requirements: To claim the EIC without a qualifying child, your main home must be in the United States for more than half the year (at least 183 days in 2024). Military members on extended active duty outside the U.S. count as having their main home in the United States during that period.

Part V Removal: The 2024 version of Form 8862 eliminated Part V, which previously dealt with situations where more than one person could claim a child. This simplifies the form but doesn't change the underlying rule that only one person can claim a child for these credits.

Delayed Refunds: Even if you file Form 8862 correctly, the IRS cannot issue refunds before mid-February for any return claiming the Earned Income Credit or Additional Child Tax Credit. This applies to your entire refund, not just the portion related to these credits.

Step-by-Step Guide (High Level)

Step 1: Determine if you need the form. Check whether you had a previous credit denial that wasn't just a math error. If you're unsure, review any IRS notices you received when your credit was reduced or denied. Look for language about ""disallowance"" or requirements to file Form 8862.

Step 2: Gather documentation. Before filling out Form 8862, collect records proving your eligibility: birth certificates for qualifying children, school records showing your child lived with you, proof of U.S. residency, college enrollment documentation for education credits, and Social Security cards showing valid SSNs.

Step 3: Complete Part I (All Filers). Enter the tax year you're claiming the credit for (2024 if you're filing your 2024 return). Check the box for each credit you're claiming—you can check multiple boxes if you're claiming more than one credit.

Step 4: Complete the relevant sections. Fill out Part II if claiming the Earned Income Credit (Section A for filers with qualifying children, Section B for filers without qualifying children). Complete Part III if claiming Child Tax Credit, Additional Child Tax Credit, or Credit for Other Dependents. Complete Part IV if claiming the American Opportunity Tax Credit. You only fill out the sections for credits you're actually claiming.

Step 5: Answer all questions carefully. The form asks specific questions about days lived in the U.S., children's ages, residency periods, and dependency status. Don't skip questions or guess—the IRS will review these answers closely. If a question doesn't apply to you, follow the form's instructions to skip to the next relevant section.

Step 6: Attach to your tax return. Form 8862 doesn't get mailed separately—it must be attached to your complete tax return (Form 1040 or 1040-SR). Include all other required schedules and forms for the credits you're claiming, such as Schedule EIC for the Earned Income Credit or Form 8863 for the American Opportunity Credit.

Step 7: File and wait. You can file electronically or by mail, but if you're appealing a ban period, you must file a paper return. Be prepared for longer processing times—the IRS may take several months to review returns with Form 8862 attached, as they require additional scrutiny.

Common Mistakes and How to Avoid Them

Mistake #1: Filing during a ban period. Many taxpayers don't realize they're prohibited from claiming credits for 2 or 10 years after a final determination of reckless disregard or fraud. Check any IRS notices carefully for language about disallowance periods. If you're banned, filing Form 8862 won't help—wait until the ban expires.

Mistake #2: Claiming children who don't meet all requirements. For the Earned Income Credit, your qualifying child must meet four tests: relationship, age, residency, and joint return. The most common error is the residency test—the child must live with you for more than half the year (more than 182 days). Don't round up; count actual days. Temporary absences for school, vacation, or medical care count as time living with you.

Mistake #3: Using an ITIN instead of an SSN for the EIC. Individual Taxpayer Identification Numbers don't qualify for the Earned Income Credit—you must have a valid Social Security Number. However, ITINs do work for the Child Tax Credit, Additional Child Tax Credit, Credit for Other Dependents, and American Opportunity Credit. Check which credits require which identification numbers.

Mistake #4: Not filing the form when required. Some taxpayers don't realize they need Form 8862 after a previous denial. If your credit was reduced or disallowed for any reason beyond a simple math error, you must file Form 8862 the next time you claim it. Filing without the form will delay your refund while the IRS requests the missing form.

Mistake #5: Forgetting the timing requirement for SSNs. Social Security Numbers must be issued by the tax return due date (including extensions) to count for these credits. If your child receives an SSN after you file, you can't amend your return to claim credits based on that SSN. Plan ahead if you're expecting a baby or adopting a child—apply for SSNs promptly.

Mistake #6: Filing Form 8862 when it's not needed. If you successfully filed Form 8862 before and the IRS allowed your credit, you don't need to file it again unless there's been another disallowance. Some taxpayers mistakenly file it every year, which wastes time and can cause processing delays.

Mistake #7: Incomplete or inconsistent information. The IRS cross-references your Form 8862 answers with other parts of your return and their databases. If you report different information on Schedule EIC than on Form 8862, or if the days your child lived with you don't add up, your return will be flagged for review. Be consistent and accurate across all forms.

What Happens After You File

Once you submit your tax return with Form 8862 attached, the IRS routes it for special processing. These returns receive additional scrutiny compared to standard returns, so expect longer processing times—often several months rather than the typical 21 days for electronic returns.

Initial Processing: The IRS first verifies that Form 8862 is complete and that you've included all required supporting schedules (like Schedule EIC or Form 8863). If anything is missing, they'll send you a letter requesting the missing information, which further delays processing.

Verification Phase: The IRS reviews your answers on Form 8862 against their records and may cross-check with other agencies. For example, they might verify that the Social Security Numbers you provided were issued by the stated date, or confirm that children you're claiming aren't being claimed by someone else. They may also compare your current Form 8862 answers to the information from your previously denied return to see if your circumstances have genuinely changed.

Possible Outcomes:

If the IRS determines you meet all eligibility requirements, they'll process your return and issue your refund. However, remember that refunds for returns claiming the EIC or ACTC cannot be issued before mid-February, regardless of when you file. Your refund will include the credit amount you claimed.

If the IRS finds you still don't meet the requirements, they'll send you a notice explaining why your credit was denied again. This notice will typically be a Letter 566 or CP75 notice. You'll have 30 days to respond with additional information or documentation to support your claim.

If you don't respond or the IRS remains unconvinced, they'll issue a final determination disallowing your credit. At that point, you'll owe back any refund they issued, plus interest. You may also face penalties if the IRS determines your claim was frivolous or fraudulent.

Appeal Rights: If you disagree with the IRS's decision, you have the right to appeal. You can request an appeal with the IRS Office of Appeals or challenge the determination in U.S. Tax Court. The notice you receive will explain your appeal options and deadlines.

FAQs

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

Can I e-file my return with Form 8862?

What if I can't remember which year my credit was denied?

How long does it take to get my refund if I file Form 8862?

What documentation should I keep in case the IRS audits my Form 8862?

Can I claim some credits without Form 8862 if only one credit was previously denied?

What happens if I accidentally file Form 8862 when I didn't need to?

Source: All information in this summary comes from official IRS publications, including Form 8862 and Instructions (October 2024 revision), IRS.gov guidance on credit disallowances, and related IRS publications available at IRS.gov.