Form 1040A (Schedule 8812): Additional Child Tax Credit — 2018
What Form 1040A Schedule 8812 Is For
Schedule 8812 helps families get money back even when they don't owe taxes. Think of it as a second chance at tax relief for parents who qualify for the Child Tax Credit but couldn't use all of it because their tax bill wasn't high enough to absorb the full credit. While the regular Child Tax Credit can only reduce the amount of tax you owe down to zero, the Additional Child Tax Credit (ACTC) goes further—the IRS can actually send you a refund check for the unused portion. For the 2018 tax year, you could receive up to $1,400 per qualifying child through this credit.
The form attaches to your main tax return (Form 1040 or 1040NR) and uses information about your earned income and Social Security taxes paid to calculate whether you're eligible for this refundable credit. It's particularly valuable for lower-income working families who earn enough to pay Social Security and Medicare taxes from their paychecks but don't earn enough to owe much federal income tax.
When You’d Use Form 1040A Schedule 8812 (Late or Amended Returns)
You would file Schedule 8812 with your original 2018 tax return if you first completed the Child Tax Credit worksheet in your Form 1040 instructions and discovered you couldn't use your full Child Tax Credit. The worksheet will specifically direct you to Schedule 8812 if you appear eligible for the refundable portion.
If you're filing a late return for 2018, you can still claim the ACTC as long as you file within the statute of limitations (generally three years from the original due date). However, timing matters significantly for one critical requirement: every qualifying child must have a Social Security Number that was valid for employment and issued before the due date of your 2018 return, including extensions. If a child's SSN was issued after that deadline, you cannot use that child to claim the ACTC, even on an amended return.
When filing an amended return using Form 1040-X, you can add Schedule 8812 if you originally missed claiming the ACTC. The same SSN timing rule applies—the child's required SSN must have been issued before your original return's due date. Additionally, if the IRS previously denied or reduced your Child Tax Credit or ACTC for any year after 2015 for reasons other than simple math errors, you'll need to attach Form 8862 to prove you're now eligible unless a specific exception applies.
Key Rules or Details for 2018
The cornerstone requirement is the Social Security Number rule: each qualifying child must have an SSN that is valid for employment and was issued before your 2018 return's due date, including extensions. This is not negotiable. If your child has an Individual Taxpayer Identification Number (ITIN) or Adoption Taxpayer Identification Number (ATIN) instead of an employment-authorized SSN, that child cannot be used for the ACTC, though you might qualify for the separate Credit for Other Dependents.
You, the taxpayer, must also have a valid taxpayer identification number (either an SSN or ITIN) issued by the return's due date. The earned income threshold for 2018 is $2,500—meaning you must have earned at least this amount from wages, self-employment, or nontaxable combat pay to potentially qualify. For 2018, the maximum Additional Child Tax Credit increased to $1,400 per qualifying child, up from prior years.
Certain taxpayers are automatically disqualified: if you file Form 2555 or Form 2555-EZ to claim the foreign earned income exclusion, you cannot claim the ACTC at all. The child must meet all the standard qualifying child tests—be under age 17 at the end of 2018, be your son, daughter, stepchild, foster child, sibling, or descendant of any of these, have lived with you for more than half the year, not have provided over half their own support, be a U.S. citizen or resident alien, and be claimed as your dependent.
One helpful disaster-relief provision: if your main home was in a federally declared disaster area and your 2017 earned income exceeded your 2018 earned income, you could elect to use the 2017 figure instead when calculating your credit. This election must be noted on your return by writing "PYEI" and the 2017 earned income amount next to the appropriate line.
Step-by-Step (High Level)
Begin by completing your regular Form 1040 through the Child Tax Credit and Credit for Other Dependents Worksheet found in the Form 1040 instructions. This worksheet calculates your regular, nonrefundable Child Tax Credit. At the end of that worksheet, the instructions will tell you whether to proceed to Schedule 8812—generally, this happens when your Child Tax Credit exceeds your tax liability.
On Schedule 8812 itself, Part I applies to everyone. You'll enter the amount from your Child Tax Credit worksheet, subtract your regular Child Tax Credit from Form 1040, and multiply the number of qualifying children by $1,400. Then you'll calculate your earned income using specific IRS guidelines that include wages, self-employment income, and nontaxable combat pay, while excluding certain scholarship income, prison wages, and nonqualified pension distributions. The form tests whether your earned income minus $2,500, multiplied by 15 percent, generates a credit.
If you have three or more qualifying children, you'll also complete Part II, which offers an alternative calculation based on your Social Security and Medicare taxes withheld. The IRS will use whichever method—Part I or Part II—gives you the larger credit. This alternative path recognizes that families with several children and lower incomes may have paid significant payroll taxes even if they had little income tax liability.
Part III simply records your final Additional Child Tax Credit amount, which you then transfer to the appropriate line on your main Form 1040 (line 17b) or Form 1040NR (line 64). The IRS will include this amount in your refund.
Common Mistakes and How to Avoid Them
The most frequent error is using a child who lacks the required SSN. Not just any SSN will do—it must be valid for employment and issued before your return's due date including extensions. Check your child's Social Security card carefully. If it says "Not Valid for Employment" or "Valid for Work Only With DHS Authorization," make sure the authorization hasn't expired or that you've obtained an updated card if your child's immigration status changed. Don't assume an ITIN or ATIN will work for the ACTC—it won't, though you might still qualify for a different credit.
Many taxpayers incorrectly attempt to claim the ACTC while filing Form 2555 or 2555-EZ for foreign earned income exclusion. These forms make you ineligible—period. If you're working abroad, review your options carefully with a tax professional, as you'll need to choose between the foreign earned income exclusion and the Additional Child Tax Credit; you cannot have both.
Miscalculating earned income causes frequent problems. The earned income definition for Schedule 8812 is specific and technical. You must include taxable wages and self-employment income, but you must exclude scholarship or fellowship amounts not reported on W-2s, wages earned while incarcerated, and distributions from nonqualified deferred compensation plans. If you're self-employed or have farm income, you'll need to use the Earned Income Worksheet in IRS Publication 972 rather than simply copying a number from your return. Many people also forget to include nontaxable combat pay, which should be added to earned income for this calculation.
Failing to attach required documentation creates processing delays. If your Child Tax Credit or ACTC was previously denied or reduced after 2015, you must attach Form 8862 unless you qualify for an exception. Not attaching this form when required will result in the IRS rejecting your ACTC claim. Additionally, taxpayers sometimes overlook entering each qualifying child's SSN in the dependents section of Form 1040 and checking the "Child tax credit" box in column 4—both steps are mandatory for the credit to process.
What Happens After You File
The IRS processes returns claiming the Additional Child Tax Credit under special timing rules. Federal law prohibits the IRS from issuing refunds before mid-February for any return that claims the ACTC. This delay applies to your entire refund, not just the portion related to the credit. For 2018 returns filed in 2019, this meant no refund could be issued before mid-February 2019, regardless of when you filed. The IRS instituted this delay to allow more time to verify eligibility and combat fraud. Don't panic if your refund takes longer than a friend's refund who didn't claim the ACTC—the delay is mandated by law and not a reflection of problems with your return.
If your return is selected for additional review, the IRS may request documentation proving your child qualifies. This could include school records, medical records, or other documents showing the child lived with you for more than half the year. Respond promptly to any IRS correspondence with the requested documents to avoid delays or denial of your credit.
When you receive your refund, remember that ACTC payments have special protections. The refund cannot be counted as income when determining your eligibility for federal benefit programs like Temporary Assistance for Needy Families (TANF), Medicaid, Supplemental Security Income (SSI), or SNAP (food stamps). Furthermore, the refund cannot be counted as a resource—meaning it doesn't affect your asset limits for these programs—for at least 12 months after you receive it. State and local programs financed with federal funds must follow the same rules. Despite these protections, it's wise to inform your benefits caseworker about the refund to avoid any misunderstandings.
If the IRS determines your ACTC claim was erroneous due to reckless or intentional disregard of the rules, you'll be banned from claiming the Child Tax Credit, Credit for Other Dependents, or Additional Child Tax Credit for two years. If the IRS determines the error involved fraud, the ban extends to ten years. You may also face accuracy-related penalties or fraud penalties. These are serious consequences, so if you're unsure about your eligibility, consult a qualified tax professional before claiming the credit.
FAQs
My child was born in December 2018 but I haven't received their Social Security card yet. Can I still claim the ACTC when I file in early 2019?
Yes, but only if the Social Security Administration issues the SSN before the due date of your return, including extensions. If you file on April 15, 2019 without the SSN, you cannot claim the ACTC for that child on that return. However, if you request an extension until October 15, 2019 and the SSN is issued before that extended deadline, you can claim the credit. If the SSN arrives after your filing deadline, you cannot claim the ACTC for that child even by filing an amended return—this is a strict rule with no exceptions.
I received the Child Tax Credit on my Form 1040, but it only reduced my taxes to zero. Do I automatically get the Additional Child Tax Credit too?
Not automatically—you must complete Schedule 8812 to claim it. The Child Tax Credit is "nonrefundable," meaning it can only reduce your tax bill to zero. If you had more credit available than you owed in taxes, you might be eligible to receive the difference as the "additional" (refundable) portion. Schedule 8812 calculates whether your earned income and family size make you eligible for this refund. Don't leave money on the table—complete the schedule if the worksheet directs you to do so.
Does the ACTC reduce my Earned Income Credit, or do they work together?
They work together—claiming the ACTC does not reduce your Earned Income Credit. Both credits can appear on the same return, and in fact, many lower-income working families qualify for both. However, there's one important interaction: if you elect to use your prior year earned income for the Earned Income Credit (available to disaster victims), you must also use that prior year earned income when calculating your ACTC. You cannot pick and choose different years for different credits.
I claimed the ACTC last year without any problems. Do I need to do anything special to claim it again this year?
Generally no, as long as your circumstances haven't changed and your previous claim was approved. However, if the IRS denied or reduced your Child Tax Credit or ACTC in any year after 2015 for reasons other than a simple math error, you must complete and attach Form 8862 to recertify your eligibility before claiming the ACTC again. This form asks detailed questions about your qualifying children and whether your situation has changed. If your prior claim was never questioned or denied, you can simply complete Schedule 8812 normally.
Can I claim the Additional Child Tax Credit for a child who lives with me but isn't my biological child?
Potentially yes, depending on the relationship. The qualifying child rules extend beyond biological children to include stepchildren, foster children (if placed by an authorized agency), siblings, half-siblings, step-siblings, and descendants of any of these (such as grandchildren, nieces, or nephews). The child must meet all the other requirements including living with you more than half the year, being under 17, not providing over half their own support, being a U.S. citizen or resident alien, and having the required SSN. Legal guardianship may help establish the relationship, but the key factors are the family relationship and shared residence, not formal custody arrangements.
My 2018 income was very low because I was unemployed for several months. Someone told me I might be able to use my 2017 income instead. Is that true?
Only in limited circumstances. For 2018, Congress allowed taxpayers affected by certain federally declared disasters to use their 2017 earned income instead of 2018 earned income if the 2017 amount was higher and their main home was located in the qualified disaster area during the disaster's incident period. This special rule was designed to help disaster victims whose incomes dropped due to the disaster. If you weren't affected by a declared disaster, you must use your actual 2018 earned income. If you were affected, write "PYEI" (prior year earned income) and the 2017 amount on your return next to the appropriate line, and see the Schedule 8812 instructions for complete details.
Where will my Additional Child Tax Credit appear on my tax return, and what should I expect from the IRS?
The final ACTC amount from Schedule 8812, line 15, gets entered on Form 1040, line 17b (or Form 1040NR, line 64). This amount is then combined with other refundable credits and payments on your return to calculate your total refund or remaining tax due. The ACTC increases your refund or reduces any balance you owe. Remember that the IRS cannot issue any refund—including amounts not related to the ACTC—before mid-February if you claim this credit. You can check your refund status using the "Where's My Refund?" tool on IRS.gov approximately 24 hours after e-filing or four weeks after mailing a paper return.
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