Form 8812 (Schedule 8812) 2020 Tax Year Checklist
Year and Form Uniqueness
The 2020 Schedule 8812 permits election to use prior-year earned income when 2019 earnings exceed 2020 earnings, allowing ACTC calculation despite reduced 2020 income. This form attaches exclusively to Form 1040, 1040-SR, or 1040-NR and prohibits joint filers of Form 2555 from claiming any ACTC amount.
2020-Specific Program Applicability
For 2020 tax year filers, recent legislation permits an election to claim the Additional Child Tax Credit using 2019 earned income on line 6a if that prior-year income exceeds 2020 income. The IRS delayed refunds for returns claiming the ACTC, releasing such refunds no earlier than mid-February 2021, as per the Protecting Americans from Tax Hikes (PATH) Act. No stimulus payment reconciliation is required on Schedule 8812 for 2020; Economic Impact Payments are not reported on this form.
Ten-Step Checklist
Step 1: Complete Base Tax Return Through Child Tax Credit Calculation
Complete Form 1040, 1040-SR, or 1040-NR through line 19 (Child Tax Credit and Credit for Other Dependents Worksheet per your instructions). Do not file Schedule 8812 if your calculated Child Tax Credit is zero or if you filed Form 2555 for foreign earned income exclusion.
Step 2: Verify Qualifying Child Requirements
Verify each qualifying child has a valid Social Security Number (SSN) issued before the tax return due date (including extensions). A qualifying child must be under age 17 at year-end 2020, a U.S. citizen, national, or resident alien, and claimed as your dependent. Collect W-2 forms and birth documents confirming age and identity.
Step 3: Calculate Earned Income and Consider Prior-Year Election
Calculate earned income per the Earned Income Chart in the Schedule 8812 instructions. Include wages from Form W-2, net profit from Schedule C, Schedule SE self-employment earnings, and nontaxable combat pay (Form W-2, box 12, code Q). If 2019 earned income exceeds 2020 earned income, prepare to elect prior-year earnings by entering PYEI notation on line 28.
Step 4: Enter Child Tax Credit Worksheet Amount
Enter line 1 amount from line 8 or line 10 of your Child Tax Credit and Credit for Other Dependents Worksheet, depending on whether you use Publication 972 (for filers excluding Puerto Rico income or filing Form 2555 subsets). If not using Pub. 972, use line 8 of the worksheet.
Step 5: Enter Child Tax Credit from Form 1040 Line 19
Enter line 2 amount from line 19 of Form 1040, Form 1040-SR, or 1040-NR (the Child Tax Credit or Credit for Other Dependents line). Subtract line 2 from line 1 to obtain line 3. If line 3 equals zero, stop—you cannot claim the Additional Child Tax Credit.
Step 6: Calculate Maximum Additional Child Tax Credit
On line 4, multiply the number of qualifying children under 17 by the required SSN by $1,400 (the 2020 threshold per child). If line 4 equals zero, stop. Do not proceed to line 5 if no qualifying children are documented with valid SSNs.
Step 7: Determine Smaller Amount and Part II Eligibility
Enter the smaller of line 3 or line 4 on line 5. Determine if the line 4 amount is $4,200 or more. If yes, proceed to Part II. If the answer is no and line 8 is zero, stop and do not claim ACTC.
Step 8: Calculate 15 Percent of Earned Income Above Threshold
Enter earned income on line 6a using the Earned Income Chart. On line 6b, enter any nontaxable combat pay from W-2, box 12, code Q. If line 6a does not exceed $2,500, leave line 7 blank and enter -0- on line 8; otherwise, subtract $2,500 from line 6a and multiply that result by 0.15 (15%) for line 8.
Step 9: Complete Part II for Three or More Qualifying Children
For Part II (filers with three or more qualifying children), enter withheld Social Security, Medicare, and Additional Medicare taxes from Form W-2, boxes 4 and 6, on line 9. Enter the total from Schedule 1 (Form 1040), line 14, Schedule 2 (Form 1040), line 5, and any taxes identified with code UT on Schedule 2, line 8, on line 10. Add lines 9 and 10 for line 11.
Step 10: Finalize and Attach Schedule 8812
Prepare Schedule 8812 for attachment to Form 1040, 1040-SR, or 1040-NR. Enter the final Additional Child Tax Credit amount from line 15 on Form 1040, line 28; Form 1040-SR, line 28; or Form 1040-NR, line 28. Do not mail separately; attach securely to your base return. See the IRS Where to File page for Schedule 8812 (2020).
Form Changes in 2020
Line 6a Election to Prior-Year Earned Income
Prior instruction: Election to use prior-year earned income was not explicitly permitted in previous guidance. Current instruction: 2020 allows taxpayers to elect line 6a entry using 2019 earned income if 2019 earnings exceed 2020 earnings; notation PYEI must be entered on line 28 of the return. Change type: Added.
Part II Applicability and Thresholds
Prior instruction: Part II calculation for filers with three or more qualifying children referenced tax thresholds and credits without explicit modernization. Current instruction: The 2020 Part II explicitly references Schedule 1, line 14 (instead of prior-year form references), and Schedule 2, line 5, and code UT on line 8, reflecting the form redesign. Change type: Clarified and updated in accordance with the Schedule 1 and 2 redesign.
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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.
