IRS Form 1040A (Schedule 8812) (2013): Child Tax Credit

What IRS Form 1040A (Schedule 8812) (2013) Is For

IRS Form 1040A (Schedule 8812) (2013) is used to calculate the child tax credit and the additional child tax credit for eligible taxpayers who have qualifying children and need to determine if any portion of the credit is refundable. The form allows taxpayers to compare their child tax credits against their federal income tax liability to determine if they are eligible to claim the additional child tax credit. This provides financial relief for low-income families by reducing federal income taxes or generating a refund. 

For more help with claiming the child tax credit, ITIN documentation, and refundable credits, visit our IRS Form Help Center.

When You’d Use IRS Form 1040A (Schedule 8812) (2013)

This form is used when taxpayers need to determine their eligibility for child-related tax credits.

• Claiming the Child Tax Credit for qualifying children: Taxpayers use Schedule 8812 when they have dependent children who meet the qualifying child requirement and need to verify whether the Child Tax Credit applies to their federal income tax return.
  
  
• Qualifying for the additional child tax credit: Taxpayers complete the form when their federal income tax liability is too low to use the full child credit. They need to calculate the refundable portion available through the additional child tax credit.
  
  
• Using identifying numbers (individual taxpayer identification number): Taxpayers use the form when dependent children do not have Social Security numbers and must document residency to meet Internal Revenue Service requirements.
  
  
• Filing an amended federal income tax return for the same tax year: Taxpayers use Schedule 8812 when filing Form 1040X to claim the Child Tax Credit Act that was not claimed originally or to correct income entries that affect the total credit available.

Key Rules or Details for Tax Year 2013

Several rules for tax year 2013 govern the claiming of child-related tax credits.

• Meeting the qualifying child requirement: The taxpayer must confirm that each dependent child is under age 17 and lived with them for more than half the year. They should also have received the required level of financial support to qualify for the child tax credit.
  
  
• Understanding income limits and filing status rules: The maximum child tax credit begins to phase out when the modified adjusted gross income exceeds federal thresholds that vary based on filing status, including whether the taxpayer is filing jointly or individually.
  
  
• Including only earned income in calculations: The taxpayer must use only eligible earned income, such as wages or self-employment income, in these calculations. Additionally, nontaxable combat pay may be included if it increases the refundable credit amount.
  
  
• Recognizing how the American Rescue Plan Act differs: The expanded Child Tax Credit (CTC) created by the American Rescue Plan does not apply to this tax year. Thus, the taxpayer must follow the original tax law and rely on the rules for 2013 only.
  
  
• Understanding refundable and nonrefundable credit limits: The full child tax credit is nonrefundable, while the additional child tax credit is a refundable credit that may increase the taxpayer’s refund when the refundable portion applies.

Want help with your child tax credit, amended return, or resolving IRS issues? Start your case review for support from our tax professionals.

Step-by-Step (High Level)

The tax preparation process for IRS Form 1040A (Schedule 8812) (2013) requires careful review of income, credit eligibility, and supporting documents.

• Reviewing all tax forms and income documents: The taxpayer begins by gathering wage statements, income summaries, and other tax forms to ensure that taxable income, gross income, and earned income entries are complete and accurate.
  
  
• Completing child tax credit calculations on form 1040: The taxpayer uses the child tax credit worksheet to determine whether the initial credit reduces federal income tax liability or whether the remaining amount requires completion of Schedule 8812.
  
  
• Calculating earned income and comparing credit amounts: The taxpayer enters their earned income to determine whether the income level qualifies for the refundable portion of the Additional Child Tax Credit. They then check whether the total credit amount increases based on the income calculations.
  
  
• Applying the three or more qualifying children rule: The taxpayer compares the refundable calculation to the withheld Social Security taxes when three or more qualifying children are claimed to determine if this method results in a higher maximum credit amount.
  
  
• Completing the federal income tax return and verifying entries: The taxpayer reviews all results, confirms that residency rules and support rules are satisfied, and checks whether other tax benefits or other tax credits apply before submitting the federal income tax return.

Common Mistakes and How to Avoid Them

• Incorrectly identifying qualifying children: Taxpayers should verify that each child meets the relationship, age, residency, and support requirements to ensure the child is a qualifying child for tax credit purposes.
  
  
• Misreporting earned income or adjusted gross income: Taxpayers should double-check wages, self-employment income, and adjusted gross income entries to avoid inaccurate calculations that change the refundable portion or total credit.
  
  
• Failing to include required residency documentation: Taxpayers should maintain school records, medical records, or other documents to confirm that dependent children lived with them for more than half the year, especially when using an Individual Taxpayer Identification Number (ITIN).
  
  
• Skipping the three-or-more-children comparison section: Taxpayers should complete this step when applicable, as the comparison may increase the refund or reduce financial burdens for families with three or more dependent children.

If you face IRS penalties or have had your refund denied due to child tax credit errors, review your eligibility for penalty abatement.

What Happens After You File

After the taxpayer files IRS Form 1040A (Schedule 8812) (2013), the Internal Revenue Service reviews the federal income tax return to verify income entries, dependent information, and the accuracy of all credit calculations. The refundable credit appears in the tax refund if the taxpayer qualifies for the additional child tax credit. The IRS may request documentation when residency, support, or income records require verification. The processing timeline varies, but accurate entries help reduce delays and support a smoother review of federal income taxes.

FAQs

Can I claim the Child Tax Credit if my federal income tax liability is zero?

Yes, you may still qualify because the additional child tax credit allows eligible taxpayers to receive a refundable portion that can increase the tax refund even when federal income tax liability is zero.

Do I need Schedule 8812 for every qualifying child? 

You need to schedule 8812 when the initial child tax credit does not fully apply on the federal income tax return, and you must calculate the remaining refundable credit for qualifying children.

Can I use an Individual Taxpayer Identification Number (ITIN) for a qualifying child?

Yes, you may use an individual taxpayer identification number when the child meets the residency rules and other qualifying child requirements, and Schedule 8812 verifies compliance with IRS regulations.

Can the additional child tax credit increase my tax refund?

Yes, the refundable portion of the additional child tax credit may increase the tax refund when earned income allows the taxpayer to claim the additional child amount that exceeds the federal income tax liability.