Form 8862 (Rev. December 2021)—2021 Tax Year Checklist
Purpose
Form 8862 allows taxpayers to reclaim the Earned Income Credit, Child Tax Credit, Additional Child Tax Credit, Refundable Child Tax Credit, Credit for Other Dependents, or American Opportunity Tax Credit after prior disallowance. For 2021, the American Rescue Plan Act expanded the Child Tax Credit to include a temporary increase in the refundable portion and a new enhanced credit structure, applicable only to those who qualify. Form 8862 must document eligibility under these modified rules.
Required Steps
Step 1: Enter the Tax Year
Enter 2021 on line 1 as the tax year for which you are filing. This year-specific entry triggers the application of 2021 credit parameters, including the enhanced Child Tax Credit maximum amounts ($3,600 for children under age 6 and $3,000 for children aged 6–17), as well as ARPA refundable credit provisions that differ materially from those in prior years.
Step 2: Check the Applicable Credit Boxes
Check the applicable credit box(es) in Part I: Earned Income Credit, Child Tax Credit/Refundable/Additional/Credit for Other Dependents, or American Opportunity Tax Credit. Only credits marked here qualify for reclamation under 2021 rules. Unmarked credits cannot be claimed via this form.
Step 3: Answer Income Reporting Question (EIC Filers)
For Earned Income Credit filers, answer question 3 regarding whether EIC was reduced solely due to incorrect earned income or investment income reporting. A “Yes” answer permits a direct claim without completing the remainder of Part II, reflecting 2021 streamlined procedures for income-reporting-only disputes.
Step 4: Verify Qualifying Child Status
Answer question 4 truthfully: whether you or your spouse (if filing jointly) could be claimed as a qualifying child by another taxpayer for 2021. A “Yes” answer disqualifies EIC entirely under 2021 rules. This determination is mandatory before proceeding.
Step 5: Complete Section A (EIC with Qualifying Children)
If claiming EIC with qualifying children, complete Section A by entering the names of each child (up to three) exactly as listed on your 2021 Schedule EIC. Question 6 requires confirmation that your completed 2021 Schedule EIC identified at least one qualifying child. A “No” answer eliminates EIC eligibility.
Step 6: Enter Days of Residency
For each child in Section A, enter the number of days that child lived with you in the United States during 2021. The requirement is more than half of the year. For a standard full year, this means the child must have lived with you for more than half of 2021.
Temporary absences for school, vacation, business, medical care, military service, or detention in a juvenile facility count as time the child lived with you. If a child was born or died during 2021 and your home was the child’s home for more than half the time the child was alive, enter “365” on line 7.
Step 7: Complete Part III (Child Tax Credits)
Complete Part III (CTC/RCTC/ACTC/ODC) by entering names of up to four qualifying children and up to four other dependents. Questions 14–17 require “Yes” answers for all four criteria: residence (more than half of 2021), qualifying child status, dependent status, and U.S. citizenship/residency under 2021 definitions. A “No” answer to any criterion eliminates that person from the credit.
For 2021, if you meet certain residency requirements, your child tax credit will be fully refundable. If you don’t meet the residency requirements, you will figure your child tax credit and additional child tax credit as if these credits were figured for 2020.
Step 8: Enter Student Information (AOTC)
For the American Opportunity Tax Credit (Part IV), enter student names as listed on your 2021 Form 8863. Confirm that the student met AOTC eligibility requirements for 2021. The student must not have had expenses used to figure an AOTC in any four earlier tax years, including any years the Hope Scholarship Credit was claimed for the same student.
Step 9: Verify Four-Year Limitation (AOTC)
Confirm that the AOTC has not been claimed for the student for any four tax years before 2021. This includes any years the Hope Scholarship Credit was claimed. If the credit has been claimed for four prior tax years, the student is not eligible for AOTC in 2021.
Step 10: Complete Part V (Tiebreaker Rules)
Complete Part V (Qualifying Child of More Than One Person) if applicable. Apply tiebreaker rules per Publication 501 (2021 edition) to resolve conflicts when a child meets conditions as a qualifying child for multiple claimants. The residency address and household composition rules are determinative for 2021 only.
2021 Tax Year-Specific Updates
American Rescue Plan Act Enhancements
The American Rescue Plan Act (ARPA) expanded the 2021 Child Tax Credit refundable portion and increased credit amounts. The Form 8862 instructions reflect these 2021-only enhancements, including temporary modifications to RCTC and ACTC calculations that do not apply to prior or subsequent years. The maximum credit increased from $2,000 to $3,600 for qualifying children under the age of 6 and from $3,000 to $3,600 for children aged 6–17.
Schedule EIC Requirements
The 2021 Schedule EIC line structure and qualifying child documentation requirements were revised to align with expanded child credit rules. Prior-year forms cannot be substituted when completing Part II, Section A for 2021 claims. If you have at least one child who meets the conditions to be your qualifying child for purposes of claiming the EIC, complete and attach Schedule EIC to your Form 1040 or 1040-SR even if that child doesn’t have a valid SSN.
Age Requirements for EIC Without Qualifying Child
For 2021, special rules apply regarding age requirements for filers claiming the EIC without a qualifying child. The applicable minimum age has been lowered to 19, except for specified students who must be at least 24 years old at the end of the year. However, the applicable minimum age is lowered further for qualified former foster youth or qualified homeless youth to age 18. Additionally, you no longer need to be under age 65 to claim the EIC without a qualifying child.
Military Residency Exception
Military members stationed outside the United States during 2021 receive special residency treatment for purposes of the more-than-half-the-year test. If you were on extended active duty outside the United States, your main home is considered to be in the United States during that duty period.
Extended active duty is military duty ordered for an indefinite period or for a period of more than 90 days. This exception is explicitly addressed in the 2021 instructions and must be considered when determining residency requirements.
Separated Spouses Rule
For 2021, if you are married but don’t file a joint return, you may qualify to claim the EIC if you lived with your qualifying child for more than half the year and either you did not have the same principal residence as your spouse for the last six months of 2021 or you were legally separated from your spouse according to your state law under a written separation agreement or a decree of separate maintenance. You lived apart from your spouse at the end of 2021.
Important Reminders
Valid Social Security Number Required
You must have a taxpayer identification number issued on or before the due date of the return to claim the earned income credit, child tax credit, refundable child tax credit, additional child tax credit, credit for other dependents, or American opportunity tax credit. If you haven’t been issued a valid SSN on or before the due date of your 2021 return (including extensions), you can’t claim the EIC on either your original or amended return.
Qualifying Child SSN Requirements
If your qualifying child hasn’t been issued a valid SSN on or before the due date of your return (including extensions), you can’t count that child in figuring the amount of your EIC on either your original or amended return. However, you may still qualify to claim a self-only EIC if you meet all other requirements.
Form 8862 Filing Requirements
You must attach Form 8862 to your tax return if your EIC, CTC/RCTC/ACTC/ODC, or AOTC was reduced or disallowed for any reason other than a math or clerical error for any year after 1996 (for EIC), 2015 (for CTC/ACTC/ODC), or 2015 (for AOTC). You now meet all requirements to claim the credit again.
Ban Periods
Do not file Form 8862 for the two years after the most recent tax year for which there was a final determination that your claim was due to reckless or intentional disregard of the rules, or for the ten years after the most recent tax year for which there was a final determination that your claim was due to fraud.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
