Schedule 8812 (2016) Instructions: Additional Child
Tax Credit Guide
Schedule 8812 enables eligible taxpayers to claim the additional child tax credit, a refundable portion of the child tax credit, when filing Form 1040, Form 1040A, or Form 1040-NR for tax year
2016. The additional child tax credit may provide a refund even when you owe no federal income tax.
You must meet specific qualifying child requirements and income thresholds to claim this credit.
This guide reflects the 2016 tax law without provisions from the Tax Cuts and Jobs Act,
American Rescue Plan, or other legislation enacted after 2016.
Understanding Schedule 8812 and When to File
You must complete Schedule 8812 under two primary circumstances for the 2016 tax year. First, if you claim the child tax credit for a child identified by an Individual Taxpayer Identification
Number, you must document that the child meets the residency requirements and qualifies as a
United States resident for tax purposes.
Second, you complete Parts II through IV of Schedule 8812 when claiming the additional child tax credit after finishing the Child Tax Credit Worksheet in your Form 1040 instructions.
Generally, you file Schedule 8812 when your regular child tax credit exceeds your tax liability or when you have three or more qualifying children and meet earned income requirements.
Qualifying Child Requirements for 2016
A qualifying child must meet seven specific conditions under the 2016 rules. The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of these relationships.
Age requirements state the child must be under age 17 on December 31, 2016. A child who turns 17 during 2016 but is age 17 on December 31, 2016, does not qualify for the credit regardless of age earlier in the year.
The child must not have provided over half of their own support during 2016. Residency rules require the child to live with you for more than half of 2016, with exceptions for temporary absences such as school, vacation, or medical care.
You must claim the child as a dependent on your return. The child must not file a joint return for the year, except to claim a refund of withheld income taxes or estimated tax payments.
Each qualifying child must be a United States citizen, national, or resident alien with a valid
Taxpayer Identification Number. Children must have a Social Security number, an Adoption
Taxpayer Identification Number, or an Individual Taxpayer Identification Number issued by the due date of your return, including extensions.
Earned Income Calculation for Additional Child Tax Credit
Earned income for additional child tax credit purposes includes specific sources that you must calculate accurately. Your earned income consists of wages reported on Form W-2 and net self-employment income from Schedule C or Schedule F.
Nontaxable combat pay shown in box 12 of Form W-2 with code Q must be included in your earned income calculation. Self-employed taxpayers or those filing Schedule SE must use the earned income worksheet in Publication 972 to determine the correct amount for Schedule 8812 line 4a.
Do not include income from Schedule D capital gains or losses in your earned income calculation. Schedule E rental income and passive income also do not qualify as earned income for additional child tax credit purposes.
To qualify for the additional child tax credit, a minimum of $3,000 in earned income is necessary.
The refundable portion equals 15 percent of your earned income above the $3,000 threshold, up to the maximum credit amount per qualifying child.
Modified Adjusted Gross Income and Phase-Out Rules
For the 2016 tax year, the child tax credit offers up to $1,000 per qualifying child. Your credit begins to phase out when your modified adjusted gross income exceeds specific thresholds based on your filing status.
Phase-out thresholds for 2016 are $110,000 for married filing jointly, $75,000 for single or head of household filers, and $55,000 for married filing separately. The credit reduces by $50 for each
$1,000 of modified adjusted gross income above these thresholds, which equals a 5 percent reduction rate rather than a dollar-for-dollar reduction.
Modified adjusted gross income equals your adjusted gross income plus certain exclusions for
Puerto Rico income, foreign earned income, and income for American Samoa residents.
Taxpayers who file Form 2555 or Form 2555-EZ to claim foreign earned income exclusions cannot claim the additional child tax credit under the 2016 rules.
Required Documentation and Filing Procedures
Gather birth certificates, adoption documents, or court orders for each qualifying child before filing your tax return. Collect all Forms W-2 for wage earners, Schedule C or Schedule F for self-employed taxpayers, and Schedule K-1 if you receive partnership or S corporation income.
Retain Social Security cards or official identification documents for each qualifying child you claim on Schedule 8812. You must provide the qualifying child’s name and Social Security number on Schedule 8812 in the designated columns to prevent duplicate claims and verify eligibility with Internal Revenue Service records.
Step-by-Step Completion Process
Step 1: Complete the Child Tax Credit Worksheet
Finish the Child Tax Credit Worksheet in your Form 1040 instructions before starting Schedule
8812. The worksheet determines whether you need to complete Parts II through IV of Schedule
8812 based on your tax liability and credit amount.
Step 2: Document Substantial Presence for ITIN Children
Part I of Schedule 8812 applies only to children identified by an Individual Taxpayer
Identification Number who must meet the substantial presence test. Answer the questions in
Part I for each child with an Individual Taxpayer Identification Number to document United
States residency status.
Step 3: Calculate Your Additional Child Tax Credit
Parts II through IV calculate your additional child tax credit based on your earned income and tax liability. Enter your earned income on line 4a using the amount calculated from the earned income worksheet or your Form 1040 wage line.
Step 4: Apply the Three or More Children Alternative
Part III provides an alternative calculation method for filers with three or more qualifying children using Social Security taxes withheld and other refundable credits. Complete Part III if you have three or more qualifying children to determine if this alternative method yields a larger additional child tax credit.
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 5: Attach Schedule 8812 to Your Return
Complete all applicable sections of Schedule 8812 and attach the schedule directly behind your
Form 1040, Form 1040A, or Form 1040-NR before mailing. Transfer the final additional child tax credit amount from Schedule 8812 line 13 to Form 1040 line 67, Form 1040A line 43, or Form
1040-NR line 64.
Sign and date your Form 1040 under penalties of perjury with your Social Security number on each page. Mail the complete return with all attachments to the address specified in the 2016
Where to File instructions for your state and filing status.
Frequently Asked Questions
Can I claim the child tax credit on Form 1040EZ?
No, you cannot claim the child tax credit or additional child tax credit on Form 1040EZ for tax year 2016. You must file Form 1040, Form 1040A, or Form 1040-NR to claim these credits and attach Schedule 8812 when the Child Tax Credit Worksheet directs you to complete it.
What happens if my child turns 17 in 2016?
A child who is age 17 on December 31, 2016, does not qualify for the child tax credit regardless of age earlier in the tax year. Only children under age 17 at the end of the tax year meet the age requirement for the 2016 child tax credit and additional child tax credit.
Do I need Schedule 8812 if I have two qualifying children?
You need Schedule 8812 only if the Child Tax Credit Worksheet directs you to complete it after calculating your regular child tax credit. This typically occurs when your child tax credit exceeds your tax liability, or you meet other specific conditions outlined in the Form 1040 instructions, regardless of whether you have one, two, or more qualifying children.
Can I claim the additional child tax credit without earned income?
No, you must have earned income to claim the additional child tax credit under the 2016 rules.
The refundable portion equals 15 percent of your earned income above $3,000, so you need at least $3,001 of earned income to receive any additional child tax credit refund.
When will I receive my refund if I claim the additional child tax credit?
Federal law prevents the Internal Revenue Service from issuing refunds that include the additional child tax credit before February 15, 2017, due to the Protecting Americans from Tax
Hikes Act. This delay applies to your entire refund, not just the portion associated with the additional child tax credit, and no hardship exceptions are available for this statutory requirement.
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