Schedule 8812 (2018) Instructions: Additional Child
Tax Credit Guide
Tax year 2018 operates under the Tax Cuts and Jobs Act provisions that modified Child Tax
Credit calculations and eligibility requirements. Schedule 8812 enables taxpayers to claim the refundable portion of the Child Tax Credit, known as the Additional Child Tax Credit.
TCJA provisions governing the Child Tax Credit amount and phase-out thresholds apply for
2018. Taxpayers must use Schedule 8812 to compute any refundable credit excess after applying the nonrefundable credit limitation.
Ten-Step Compliance Process
Step 1: Verify Eligibility by Child Age and Dependent Status
Gather Social Security numbers and confirm each qualifying child was under age 17 as of
December 31, 2018, and claimed as a dependent on the 2018 Form 1040. Each child must have a valid Social Security number issued before the due date of your return, including extensions.
Step 2: Calculate Modified Adjusted Gross Income
Use the Form 1040 definition of modified adjusted gross income provided in Schedule 8812 instructions 2018 to determine if income falls below the applicable phase-out threshold. The credit begins to phase out at $200,000 for single filers and $400,000 for married couples filing jointly.
Step 3: Complete Schedule 8812 Line 1 Through Line 5
Enter the amount from line 8 of your Child Tax Credit and Credit for Other Dependents
Worksheet on Schedule 8812, line 1. This worksheet appears in the Form 1040 instructions for line 12a.
On line 2, enter the amount from Form 1040, line 12a, which represents the nonrefundable credit applied against your tax liability. Subtract line 2 from line 1 and enter the result on line 3.
On line 4, enter the number of qualifying children under 17 with the required Social Security number, then multiply that number by $1,400 and enter the result on line 5.
Step 4: Gather Earned Income Documentation
Collect all Forms W-2, Schedule C or Schedule C-EZ for self-employment income, and any other earned income documentation for 2018. Schedule 8812 uses earned income to calculate the refundable portion through the formula detailed in Part I.
Step 5: Determine Your Calculation Path
Taxpayers with fewer than three qualifying children use only the earned income formula in Part I of Schedule 8812. You subtract $2,500 from your earned income, multiply the result by 15 percent, and compare that amount to line 5.
Taxpayers with three or more qualifying children complete Part II to compare the earned income calculation with their Social Security and Medicare tax offset. Part II requires you to enter withheld taxes from Forms W-2 plus certain other taxes and payments from your return.
Step 6: Complete Part I Calculations
On line 6a, enter your earned income using the earned income chart in the Schedule 8812 instructions 2018. On line 6b, enter any nontaxable combat pay if applicable.
Line 7 asks you to subtract $2,500 from the amount on line 6a. Multiply the line 7 amount by 15 percent and enter the result on line 8. If line 8 equals or exceeds line 5, you skip Part II and enter the amount from line 5 on line 15. Filers with three or more qualifying children proceed to
Part II if line 8 is less than line 5.
- Line 9 requires you to enter withheld Social Security, Medicare, and Additional Medicare
- Line 10 requires you to enter the total of amounts from Schedule 1, line 27, Schedule 4,
- Line 11 requires you to add the amounts entered on lines 9 and 10.
- Line 12 requires you to enter the total from Form 1040, line 17a, and Schedule 5, line
- Line 13 requires you to subtract line 12 from line 11.
- Line 14 requires you to enter the larger amount from line 8 or line 13.
- Line 15 requires you to enter the smaller amount from line 5 or line 14.
Step 7: Complete Part II if Applicable
Part II applies only to filers with three or more qualifying children who have not yet determined their final refundable credit amount. Complete the following lines: taxes from Form W-2. line 58, plus any taxes identified using code “UT” on Schedule 4, line 62.
72.
Step 8: Verify Citizenship and Residency Status
Confirm that you are a U.S. citizen, national, or resident alien for 2018. Nonresident aliens filing
Form 1040-NR generally cannot claim the Additional Child Tax Credit for tax year 2018 unless they are treated as U.S. residents for tax purposes under specific IRS rules.
Step 9: Transfer Additional Child Tax Credit to Form 1040
Copy the refundable credit amount from Schedule 8812, line 15, to Form 1040, line 17b. Line
17b specifically identifies this entry as the amount from Schedule 8812, not line 16, which is for federal income tax withheld.
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Step 10: Attach Schedule 8812 and File Your Return
Attach Schedule 8812 behind your Form 1040 for 2018 in the order specified in the Form 1040 instructions. Sign and date your Form 1040 in the spaces provided.
The IRS cannot issue refunds for returns claiming this credit before mid-February 2019, which applies to the entire refund amount. Consult the IRS Where to File page for Form 1040 to determine the correct mailing address for paper return submission.
Form-Specific Limitations
Earned Income Threshold
You must have earned income exceeding $2,500 to claim any Additional Child Tax Credit in
2018. The refundable credit equals 15 percent of earned income above $2,500, up to a maximum of $1,400 per qualifying child.
Income Phase-Out
The Child Tax Credit and Additional Child Tax Credit phase out when modified adjusted gross income exceeds $200,000 for single filers or $400,000 for married couples filing jointly. The credit decreases by $50 for each $1,000 of income above these thresholds.
Foreign Earned Income Exclusion
Taxpayers who file Form 2555 or Form 2555-EZ to claim the foreign earned income exclusion cannot claim the Additional Child Tax Credit. This restriction applies regardless of the number of qualifying children or the amount of earned income.
Frequently Asked Questions
What is the difference between the Child Tax Credit and the Additional
Child Tax Credit?
The Child Tax Credit is a nonrefundable credit that reduces your tax liability dollar-for-dollar, up to $2,000 per qualifying child for 2018. The Additional Child Tax Credit is the refundable portion that you can receive as a refund, even if you owe no tax. The maximum refundable amount per child is $1,400 for tax year 2018, calculated using earned income or the three-child tax offset method.
Which line on Form 1040 shows my Additional Child Tax Credit?
Your Additional Child Tax Credit from Schedule 8812, line 15, transfers to Form 1040, line 17b for tax year 2018. Line 17b is part of the refundable credits section on page 2 of Form 1040.
Line 16 shows federal income tax withheld, while line 17 covers all refundable credits, including the earned income credit, Additional Child Tax Credit, and American Opportunity Credit.
Can nonresident aliens claim the Additional Child Tax Credit?
Nonresident aliens filing Form 1040-NR can claim the Additional Child Tax Credit if they meet specific eligibility requirements. Your qualifying child must have a valid Social Security number issued for employment, and you must be engaged in a U.S. trade or business during 2018.
Form 1040-NR includes specific lines for the Child Tax Credit on line 49 and Additional Child
Tax Credit on line 64, with corresponding instructions for Schedule 8812.
Do I need to complete Part II of Schedule 8812?
You complete Part II only if you have three or more qualifying children and your Part I calculation on line 8 is less than line 5. Part II allows you to calculate an alternative refundable credit amount based on your withheld Social Security and Medicare taxes minus certain payments and credits. You use the larger result from either the Part I earned income calculation or the Part II tax offset calculation.
Why can’t I get my Additional Child Tax Credit refund immediately?
The IRS cannot issue refunds for returns claiming the Additional Child Tax Credit before mid-February following the tax year. This delay applies to your entire refund amount, not just the portion associated with the Additional Child Tax Credit. The Protecting Americans from Tax
Hikes Act requires this holding period to allow the IRS additional time to verify eligibility and prevent fraudulent refund claims.
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