Schedule 8812 Filing Guide for 2012 Child Tax Credit

• The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother,

stepsister, or descendant of any of these relationships, including grandchildren, nieces, and nephews.

• Age requirements mandate that the child was under age 17 on December 31, 2012,

which means children born on January 1, 1996, or later qualify for this tax year.

• Residency rules require the child to have lived with you for more than half of 2012, with

temporary absences for school, vacation, medical care, military service, or detention counting as time lived with you.

• Support tests require that the child did not provide over half of their own support during

2012, and you must claim the child as a dependent on your return.

The child cannot file a joint return for the year unless filing only to claim a refund of withheld taxes. Citizenship requirements specify that the child must be a United States citizen, national, or resident alien, with children identified by Individual Taxpayer Identification Numbers meeting the substantial presence test documented in Part I.

Form 1040 Line References and Credit Placement

The Child Tax Credit appears on Form 1040, line 51, after completing the Child Tax Credit

Worksheet. You must attach Schedule 8812 to your return when claiming this credit if instructed by the worksheet, ensuring proper documentation of your qualification for refundable amounts.

Schedule 8812, line 13, calculates the Additional Child Tax Credit, which is transferred to Form

1040, line 65. This credit appears in the Payments section of your return rather than the Tax and

Credits section, reflecting its refundable nature that can generate refunds even when you owe no tax.

References to qualifying children appear on Form 1040, line 6c, where you list all dependents.

Column 4 must be checked for each child qualifying for the Child Tax Credit, distinguishing these children from other dependents who may qualify only for dependency exemptions on your federal return.

Form 1040A users report the Child Tax Credit on line 33 and the Additional Child Tax Credit on line 39. These Form 1040A line numbers differ from Form 1040 placement, but both versions require Schedule 8812 attachment when claiming refundable amounts through the additional credit calculation.

Earned Income Calculation and Nontaxable Combat Pay

Earned income for Additional Child Tax Credit purposes includes wages, salaries, tips, and net earnings from self-employment. Nontaxable combat pay received by military personnel can be included in earned income for this credit, even though it does not appear as taxable income on

Form 1040, line 7, providing additional credit opportunities for military families serving in combat zones.

You report nontaxable combat pay on Schedule 8812, line 4b, which appears in Form W-2, box

12, with code Q. Including this amount can increase your Additional Child Tax Credit by raising your earned income base for the standard calculation formula, and this treatment of combat pay has been available since prior tax years, continuing through 2012 without representing a new provision.

Form 1040A filers also include nontaxable combat pay on Schedule 8812, line 4b, following identical reporting procedures. Whether filing Form 1040A or Form 1040, military families should calculate their Additional Child Tax Credit both with and without combat pay inclusion to determine which approach produces the larger refundable credit amount.

Alternative Calculation for Earned Income Tax Credit

Filers

Taxpayers claiming the Earned Income Tax Credit may use special earned income calculation methods. If you completed Worksheet B of the Earned Income Tax Credit instructions in your

Form 1040 instructions, you use that earned income figure from Worksheet B, line 4b, plus all nontaxable combat pay not already elected for Earned Income Tax Credit purposes.

Part III of Schedule 8812 is where the Earned Income Tax Credit calculation impacts your

Additional Child Tax Credit. Your Earned Income Tax Credit amount from Form 1040, line 64a, reduces the tax amounts available for the alternative calculation method, requiring careful coordination between these two IRS forms to maximize your combined refundable credits.

Filers claiming both the Earned Income Tax Credit and the additional credit must consider how these programs interact. The Earned Income Tax Credit provides refundable amounts based on earned income and qualifying children, while the additional credit applies when the Child Tax

Credit exceeds your income tax liability, creating potential benefits from both programs.

Additional Child Tax Credit Calculation Methods

Schedule 8812 provides two calculation methods depending on your circumstances. The standard method in Part II calculates 15 percent of earned income exceeding $3,000, producing a potential refundable credit and requiring at least $3,000 in earned income to qualify for the

Additional Child Tax Credit.

Taxpayers with three or more qualifying children can use the alternative calculation in Part III.

This method compares your withheld Social Security and Medicare taxes from Forms W-2, boxes 4 and 6, to your unreduced Additional Child Tax Credit amount after subtracting refundable amounts, including the Earned Income Tax Credit.

Railroad employees include Tier 1 tax withheld shown in box 14 of Form W-2. If you were an employee representative, include 50 percent of the total Tier 1 tax paid for 2012 in your calculation, adding these railroad-specific taxes to your withholding total for comparison purposes.

The larger result from either calculation method determines your credit amount on line 13. This dual-method approach ensures families with substantial withholding can still benefit even without meeting the $3,000 earned income threshold required for the standard calculation.

Documentation Requirements and Filing Procedures

Attach Schedule 8812 to the back of your completed Form 1040 or Form 1040A when filing your

2012 return. The Internal Revenue Service processes these IRS forms together, and filing

Schedule 8812 separately from your main return causes processing delays that can postpone refund issuance for both the Additional Child Tax Credit and Earned Income Tax Credit amounts.

Verify that names and Social Security Numbers match exactly between Form 1040, line 6c;

Schedule 8812; and Social Security Administration records. Mismatches between these documents can trigger credit reductions, rejections, or correspondence from the Internal

Revenue Service requesting additional verification before processing your refund through their

IRS forms review process.

Keep supporting documents, including birth certificates, adoption records, Social Security cards, and Form W-2 statements, with your tax records. The Internal Revenue Service may request verification of qualifying child relationships, ages, and residency during return processing or subsequent audits, requiring you to produce these documents to substantiate your credit claim.

Maintain these records for at least three years from your filing date or two years from when you paid the tax, whichever is later. This recordkeeping period follows standard requirements for federal income tax returns and ensures you can respond to any Internal Revenue Service inquiries about your Additional Child Tax Credit claim.

Frequently Asked Questions

What line on Form 1040 shows the Additional Child Tax Credit for 2012?

The Additional Child Tax Credit appears on Form 1040, line 65, not on lines 12a, 12b, or 12c, which do not exist on the 2012 form. This credit appears in the Payments section because it is refundable and can generate refunds even when you owe no tax.

Do I need earned income to claim the Additional Child Tax Credit?

Most taxpayers need at least $3,000 in earned income to qualify using the standard calculation method. Taxpayers with three or more qualifying children can use an alternative calculation based on withheld Social Security and Medicare taxes, potentially qualifying without meeting the earned income threshold.

Can military families include nontaxable combat pay as earned income?

Military personnel can include nontaxable combat pay shown in Form W-2, box 12, with code Q, on Schedule 8812, line 4b. This inclusion has been available since prior tax years and can increase your Additional Child Tax Credit by raising your earned income base for calculation purposes.

When must I complete Part I of Schedule 8812?

Part I becomes mandatory when you claim the Child Tax Credit for any child identified with an

Individual Taxpayer Identification Number instead of a Social Security Number. You must document that the child meets the substantial presence test and qualifies as a United States resident for credit purposes.

Where do I enter the number of qualifying children for the Additional Child

Tax Credit?

List qualifying children on Form 1040, line 6c, and check column 4 for each child qualifying for the Child Tax Credit. The number of children with checked boxes in column 4 determines your credit calculation on Schedule 8812, distinguishing these children from other dependents.

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