Understanding Form 8862: Getting Your Tax Credits Back After IRS Disallowance (2018)

If the IRS has ever rejected or reduced one of your valuable tax credits—like the Earned Income Credit or Child Tax Credit—you might feel like you'll never get it back. But Form 8862 exists specifically to help you reclaim these credits once you're eligible again. Think of it as your second-chance application that tells the IRS, "I'm ready to prove I qualify this time."

What Form 8862 Is For

Form 8862, formally titled "Information To Claim Certain Credits After Disallowance," is essentially a recertification document. In plain English, it's the IRS's way of saying, "Show us you understand the rules now and meet all the requirements." This form applies to four major tax credits for the 2018 tax year:

• Earned Income Credit (EIC): The refundable credit for low-to-moderate income working individuals and families
• Child Tax Credit (CTC) and Additional Child Tax Credit (ACTC): Credits worth up to $2,000 per qualifying child under age 17
• Credit for Other Dependents (ODC): A $500 credit for dependents who don't qualify for CTC (newly added in 2018)
• American Opportunity Tax Credit (AOTC): An education credit worth up to $2,500 for college expenses

You must file Form 8862 if your credit was previously reduced or disallowed for any reason other than a simple math or clerical error. This includes situations where you incorrectly reported income, claimed an ineligible child, misunderstood residency rules, or failed to provide proper documentation. The form requires you to answer specific questions proving you now meet every eligibility requirement for the credit you're claiming. IRS.gov

Important exception: If your credit was simply denied due to math mistakes on your previous return—like adding numbers wrong or transposing digits—you don't need Form 8862. You can claim the credit again normally once you fix those arithmetic errors.

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

You must attach Form 8862 to your 2018 tax return if both of these conditions apply: (1) the IRS previously reduced or disallowed your credit for any reason except math/clerical errors, and (2) you now want to claim that same credit and believe you meet all requirements. This applies whether you're filing your 2018 return on time, late, or as an amended return. IRS.gov

For late 2018 returns: If you're filing your 2018 tax return late in 2019 or beyond, and you had a credit disallowed in a prior year (say, 2016 or 2017), you must include Form 8862 with your 2018 return to claim that credit again.

For amended 2018 returns: If you already filed your 2018 return but forgot to include Form 8862, you'll generally need to file an amended return using Form 1040-X and attach the completed Form 8862 to reclaim the credit. Simply submitting Form 8862 by itself won't work—it must accompany a complete tax return.

Critical timing restrictions: You cannot file Form 8862 during certain ban periods. If the IRS determined your previous credit claim involved "reckless or intentional disregard of the rules," you're banned from claiming that credit for 2 years. If fraud was involved, that ban extends to 10 years. During these ban periods, filing Form 8862 is pointless—the IRS will automatically disallow your claim. IRS.gov

You don't need Form 8862 if: After your credit was disallowed, you already filed Form 8862 once, your credit was then allowed, and it hasn't been disallowed again since. Also, if you're claiming EIC without a qualifying child and your previous denial was only because your child didn't qualify (not because you were ineligible yourself), you can claim EIC again without the form.

Key Rules for 2018

Several important rules govern Form 8862 specifically for the 2018 tax year:

Social Security Number requirements tightened: For 2018, the IRS implemented stricter identification rules. To claim CTC or ACTC, your qualifying child must have a Social Security Number (SSN) issued before the due date of your 2018 return (including extensions). Children with only an Individual Taxpayer Identification Number (ITIN) or Adoption Taxpayer Identification Number (ATIN) no longer qualify for CTC/ACTC—though they may qualify you for the new $500 ODC instead. IRS.gov

New Credit for Other Dependents (ODC) added: The 2018 tax reform created this $500 nonrefundable credit for dependents who don't qualify for CTC—including older children, parents, or other relatives. Form 8862 was expanded in 2018 to include ODC recertification requirements.

Refund delays for certain credits: By law, the IRS cannot issue any refund before mid-February (around February 15) if your return claims EIC or ACTC. This delay applies to your entire refund, not just the credit portion. This is a fraud-prevention measure and affects all taxpayers claiming these credits, not just Form 8862 filers. IRS.gov

The qualifying child "tiebreaker" rules: Only one taxpayer can claim a child for these credits. If a child qualifies multiple people (common in situations with divorced parents or multigenerational households), Form 8862 Part V requires detailed information about who else lived with the child and their relationship. The IRS uses specific tiebreaker rules: parents beat non-parents, custodial parent beats noncustodial parent, and if two non-parents both qualify, the person with higher adjusted gross income wins.

Step-by-Step Guide to Filing Form 8862 (High Level)

Here's how to approach Form 8862 without getting overwhelmed:

Step 1: Determine if you need the form. Confirm that a credit was actually disallowed in a prior year (not just reduced due to math errors), and verify you're not currently under a 2-year or 10-year ban period. Check any IRS notices you received about previous credit denials.

Step 2: Gather documentation. Collect proof that you now meet all eligibility requirements: Social Security cards for all qualifying children, school records showing where children lived, birth certificates, residency documents, income records, and any IRS correspondence about the previous disallowance. You may not need to submit these documents initially, but the IRS may request them later.

Step 3: Complete Part I (All Filers). Enter the tax year you're filing for (2018 in this case, not the year your credit was denied). Check the box for each credit you're now claiming—you can check multiple boxes if several credits were previously disallowed.

Step 4: Complete the relevant parts. Each credit has its own section with specific questions:

• Part II (EIC): Answer questions about qualifying children, residency (must live with child in U.S. for more than half the year—at least 183 days), and whether you could be claimed as someone else's dependent. If you're claiming EIC without children, you'll answer age requirements (must be 25-64 years old) and residency questions instead.
• Part III (CTC/ACTC/ODC): List each qualifying child or other dependent, confirm they lived with you more than half the year, verify they're your dependent, and confirm they're U.S. citizens/nationals/residents.
• Part IV (AOTC): List each student, verify they meet "eligible student" requirements, and confirm the credit hasn't been claimed for that student for 4 previous years.

Step 5: Complete Part V if needed. If your qualifying child could be claimed by someone else (other than your spouse), you must provide detailed information about where the child lived and who else lived with them.

Step 6: Attach to your tax return. Form 8862 cannot be filed by itself—it must be attached to your complete Form 1040 for 2018. Make sure you also include all required schedules (like Schedule EIC for earned income credit) for the credits you're claiming. Most tax software will automatically attach Form 8862 if you indicate a prior disallowance. IRS.gov

Common Mistakes and How to Avoid Them

Even well-intentioned taxpayers make predictable errors with Form 8862. Here's what to watch out for:

Mistake #1: Entering the wrong year on Line 1. Many people enter the year their credit was disallowed instead of the current tax year they're filing for. Line 1 should say "2018" if you're filing your 2018 return—not 2016 or 2017 when the credit was originally denied.

Mistake #2: Forgetting to attach Form 8862 when required. If you file without Form 8862 when it's required, the IRS will send a math error notice automatically disallowing your credit. Your return will be processed, but without the credit. You'll then need to respond to the notice or file an amended return with Form 8862 attached.

Mistake #3: Not meeting the residency day count. For EIC, qualifying children must live with you in the United States for more than half the year—that means at least 183 days (184 in leap years). Many taxpayers underestimate this requirement or miscalculate when custody is shared. Keep school records, medical records, and other documentation showing where the child lived. IRS.gov

Mistake #4: Claiming children without required SSNs. For 2018, children must have SSNs (not ITINs) to qualify for CTC/ACTC. If your child only has an ITIN, claim them for ODC instead, not CTC. Claiming the wrong credit will result in another disallowance.

Mistake #5: Filing during a ban period. If you're under a 2-year or 10-year ban, filing Form 8862 wastes time—your claim will be automatically rejected. Check your IRS disallowance letter for language about "reckless disregard" (2-year ban) or "fraud" (10-year ban) before filing.

Mistake #6: Incomplete Part V information. If your child qualifies multiple people and you skip Part V or provide vague answers, the IRS will likely deny your claim and request more information, significantly delaying your refund. Be thorough about listing everyone who lived with the child and their exact relationship.

Mistake #7: Not understanding the "tiebreaker" rules. If both you and your ex-spouse (or you and your parent) claim the same child, the IRS will apply tiebreaker rules—often awarding the credit to someone other than you expected. Review IRS Publication 501 to understand these rules before filing.

What Happens After You File

Once you submit your 2018 tax return with Form 8862 attached, the IRS follows a specific review process:

Initial processing (2-6 weeks): E-filed returns are typically accepted within 24-48 hours. The IRS then processes your return, which takes about 21 days for most e-filed returns or 6-8 weeks for paper returns. However, returns with Form 8862 may take longer because they receive additional scrutiny. IRS.gov

Enhanced review: The IRS flags returns with Form 8862 for closer examination to prevent fraud. They may verify your information against Social Security Administration records, cross-check with other tax returns (to ensure no one else claimed your child), and review prior year disallowance reasons. This doesn't mean you've done anything wrong—it's standard procedure.

Three possible outcomes:

1. Approved: If everything checks out, the IRS processes your return and issues your refund. Remember, refunds claiming EIC or ACTC cannot be issued before mid-February regardless of when you file.
2. Additional information requested: The IRS may send Letter 4903 or similar correspondence requesting documents like birth certificates, school records, medical records, or utility bills proving residency. You typically have 30-45 days to respond. Don't ignore these letters—failure to respond results in automatic credit denial.
3. Denied: If the IRS determines you still don't qualify, they'll send a notice (like CP75 or similar) explaining why your credit was disallowed again. You can appeal this decision through the IRS appeals process or wait until next year if your circumstances change.

Refund timing: If approved, your refund timeline depends on your filing method and when you filed. Most taxpayers receive refunds within 21 days of e-filing (processed in late February or after for EIC/ACTC claims). Paper returns take significantly longer—often 6-8 weeks minimum, potentially longer with Form 8862 attached.

Audit risk: Filing Form 8862 does not automatically trigger an audit, but it does invite closer scrutiny. Keep all supporting documents for at least three years after filing in case the IRS requests verification.

FAQs

How do I know if I was previously disallowed?

Check your IRS notices from prior years. You would have received Letter CP75, Letter 105C, Letter 106C, or similar correspondence explaining that your credit was reduced or disallowed. Also, the refund you actually received would have been less than what your tax return showed. If unsure, call the IRS at 1-800-829-1040 to check your account status.

Can I e-file Form 8862 or must I mail it?

For 2018, most tax software supports e-filing Form 8862 as an attachment to your Form 1040. The software automatically includes it when you answer questions about prior credit disallowances. If e-filing doesn't work (some situations require paper filing), mail your complete return with Form 8862 attached to the address shown in your Form 1040 instructions.

What if I'm still under a ban period but my circumstances have changed?

Unfortunately, ban periods are absolute. Even if your circumstances have completely changed—you got married, had another child, or received proper documentation—you cannot claim the credit during the 2-year (reckless disregard) or 10-year (fraud) ban period. You must wait until the ban expires.

Do I need Form 8862 for each credit or just once?

You file one Form 8862 covering all previously disallowed credits you're now claiming. On Line 2, check all boxes that apply—you might check both "Earned Income Credit" and "Child Tax Credit" if both were previously disallowed. Complete the corresponding parts for each credit.

What happens if I forget to file Form 8862 when required?

The IRS will send a math error notice automatically disallowing the credit and adjusting your refund downward. You'll have 60 days to respond by either accepting the adjustment or disputing it. To dispute, you'd typically need to file an amended return (Form 1040-X) with Form 8862 properly attached, or respond to the notice explaining your situation. IRS.gov

Can I claim credits for other years while under disallowance for 2018?

The ban period applies to the credit itself, not specific tax years. If you're banned from claiming EIC for 2 years starting after your 2016 credit was disallowed due to reckless disregard, you cannot claim EIC on your 2017 or 2018 returns. But once the 2-year ban expires, you can claim EIC on your 2019 return (with Form 8862) and future returns.

Where can I get help completing Form 8862?

IRS Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free tax help to qualifying taxpayers. The Taxpayer Advocate Service (1-877-777-4778) can help if you're experiencing significant hardship. You can also consult a qualified tax professional, especially if your situation involves complex custody arrangements or prior fraud determinations.

For more information:

• Form 8862 (2018 version)
• Instructions for Form 8862 (2018)
• IRS: What to do if we deny your claim for a credit
• IRS Publication 596: Earned Income Credit

This summary is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional for guidance specific to your situation.