What is Form 8862 for?
Form 8862 is used when certain credits have been previously disallowed for reasons other than a mathematical or clerical error. It helps you show the IRS that you now meet all the requirements for the earned income credit, child tax credit, additional child tax credit, refundable child tax credit, American opportunity tax credit, and the credit for other dependents. You submit the completed form with your tax return for the tax year in which you want to claim these credits again.
When You’d Use Form 8862
You use Form 8862 when your earned income credit, child tax credit, additional child tax credit, refundable credits, American opportunity tax credit, or credit for other dependents was previously reduced or denied for reasons other than clerical errors. You must attach the form to any late return, amended return, or joint return if you want to claim certain credits again. You cannot file during a ban for reckless or intentional disregard.
Key Rules or Details for 2019
- Social Security requirement: You must provide a valid Social Security Number by the tax return's due date, and qualifying children must also have a valid Social Security number for employment purposes. This rule applies to the Earned Income Credit and Child Tax Credit.
- Residency requirement: A qualifying child must live with you for more than half the tax year, including temporary absences. This factor affects the earned income credit and the child tax credit.
- Support requirement: A qualifying child cannot provide more than half of their support during the year. This rule ensures that the child meets dependency requirements for certain refundable credits.
- Age and student rules: A child must be under the age of 17 to qualify for the Child Tax Credit or be a half-time eligible student to qualify for the American Opportunity Tax Credit. This requirement also considers post-secondary education.
- Taxpayer identification rules: You must provide a taxpayer identification number for any eligible student or qualifying child listed on Form 8862. This helps verify eligibility for multiple credits.
- Income limits: Earned income and investment income must fall within the IRS guidelines for the Earned Income Credit and the Income Tax Credit. This provision ensures correct calculations for certain credits.
- Tiebreaker rules: When more than one person claims the same child, IRS rules determine who is eligible to receive the credit. These rules also apply when the child lived with either you or another taxpayer.
- Ban periods: If the IRS issues a final determination that you claimed credits with intentional disregard, you may face a two or ten-year ban. This rule applies when claims are previously disallowed for serious reasons.
Browse more tax form instructions and filing guides in our Forms Hub.
Step-by-Step (High Level)
Step 1: Enter basic information
Provide your identifying details and indicate the tax credit you want to reclaim. This step confirms whether the previously disallowed credit relates to the most recent tax year or a prior year.
Step 2: Complete Part II for the earned income credit
List each qualifying child and confirm the child lived with you for more than half the year. This step verifies earned income credit eligibility and ensures that the child meets the residency, age, and relationship requirements.
Step 3: Enter details for child tax credit and other dependents
Provide information about qualifying children, including Social Security numbers and dependency status. This step helps determine whether the child listed meets the requirements for the Child Tax Credit or the Credit for Other Dependents.
Step 4: Report education information in Part IV
Provide details about any eligible student seeking the American opportunity tax credit. This step verifies half-time enrollment, program participation, and post-secondary education requirements.
Step 5: Resolve conflicts when more than one person claims a child
Explain why you qualify for the credits when more than one person can claim the same child. This step follows IRS rules about who may claim certain credits.
Learn more about federal tax filing through our IRS Form Help Center.
Common Mistakes and How to Avoid Them
- Filing when only a math or clerical error occurred: Even when a clerical error solely reduces the credit, some taxpayers still file Form 8862. You can avoid this mistake by checking whether the IRS notice mentions clerical errors.
- Ignoring Social Security Number rules: Many taxpayers claim credits without a valid Social Security Number for the qualifying child. You can avoid this mistake by confirming the Social Security Number before the due date.
- Not documenting residency: Taxpayers sometimes claim qualifying children who did not live with them for more than half the year. You can prevent this mistake by keeping accurate records of your school, medical, or childcare information.
- Incorrectly claiming multiple eligible children: When a child meets the tests for more than one person, taxpayers may claim credits in error. You can avoid this issue by reviewing the tiebreaker rules.
- Using the incorrect tax year on the form: Some filers enter the previous year's tax year instead of the current tax year. You can prevent this by always entering the correct tax year on the completed form.
- Missing education requirements: Taxpayers sometimes claim the American Opportunity Tax Credit without confirming half-time enrollment. You can avoid this by verifying all the requirements for eligible students.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
The IRS reviews your return and Form 8862 to confirm eligibility for the previously disallowed credits. They may request an additional statement or your spouse’s information if you are filing jointly. If the IRS approves the credits, you receive them with your refund. If further information is required, promptly respond to prevent any delays.
FAQs
How does Form 8862 (2019) work when I need to claim the Child Tax Credit?
Form 8862 2019 helps you demonstrate to the IRS that your qualifying child meets the residency, age, and support requirements, allowing you to claim the child tax credit again.
Does the refundable Child Tax Credit require Form 8862 after denial?
You must file Form 8862 when your refundable child tax credit is reduced or denied, and the IRS requires recertification before you claim certain refundable credits again.
How does Form 8862 affect EIC eligibility?
Form 8862 helps you reclaim the earned income credit EIC when you meet residency, age, and earned income rules after a previous disallowance.
What if more than one person claims the same child for the earned income credit?
When more than one person claims a child, IRS tiebreaker rules decide who can claim the credit. Form 8862 helps document why you qualify.
How do I file Form 8862 when I want to claim certain credits again?
You attach Form 8862 to your tax return and include all the information needed to show you meet the requirements to claim certain credits again.
How does earned income affect Schedule EIC and Form 8862 filings?
Your earned income must meet IRS limits for Schedule EIC, and Form 8862 confirms eligibility when the credit was previously disallowed.