What is Form 8862 for?
Form 8862 helps taxpayers reclaim certain credits that the IRS previously disallowed for any reason other than a math or clerical error. It applies to the Earned Income Credit, Child Tax Credit, refundable Child Tax Credit, Additional Child Tax Credit, American Opportunity Tax Credit, and credit for other dependents.
The form confirms that you now meet all the requirements for the tax year and provides the necessary information to process your tax return correctly. You must submit the completed form when a prior-year denial remains on record for credits tied to a qualifying child, an eligible student, or other dependents.
When You’d Use Form 8862
You file Form 8862 when certain credits were previously reduced or disallowed, and you want to claim those same tax credits again for the most recent tax year. This includes situations involving residency questions, investment income limits, invalid Social Security Numbers, or issues related to qualifying children.
You also use the form when filing jointly, sending a joint return late, or preparing an amended return for a prior year. The requirement applies unless the only reason for the denial was a math or clerical error.
Key Rules or Details for 2018
- Valid Social Security Number requirement: A qualifying child must have a valid Social Security Number issued by the due date for the tax year. This rule affects the Child Tax Credit, Additional Child Tax Credit, and Refundable Child Tax Credit.
- Residency and support rules: A qualifying child must live with you for more than half the tax year and cannot provide more than half of their support. These rules determine eligibility for the Earned Income Credit and other dependents.
- Rules for Certain Refundable Credits: Form 8862 is required when certain refundable credits were previously disallowed for reasons unrelated to mathematical or clerical errors. This applies to credits such as the earned income tax credit and refundable credits tied to qualifying children.
- Education verification for AOTC: The American Opportunity Tax Credit requires each eligible student to attend post-secondary education at least half-time. The IRS also checks taxpayer identification numbers when verifying the Hope Scholarship credit.
- Tie-breaker and multi-claim situations: When more than one person claims the same child, the IRS uses tie-breaker rules based on earned income and residency. These rules determine who can claim certain credits when a child meets the eligibility requirements of multiple taxpayers.
Browse more tax form instructions and filing guides in our Forms Hub.
Step-by-Step (High Level)
Step 1: Confirm your requirement to file
Form 8862 is required when certain credits were previously disallowed for reasons other than mathematical or clerical errors. You verify the IRS determination and ensure you meet every eligibility rule before completing the form.
Step 2: Gather all documentation
Collect proof such as residency records, school transcripts, documentation of temporary absences, Social Security cards, and income tax credit information. These documents support your claim for earned income, qualifying children, or eligible students listed on the form.
Step 3: Complete Part I and check applicable credits
You complete Part I by selecting each credit you want to reclaim, including the Earned Income Credit, Child Tax Credit, and American Opportunity Tax Credit. You also confirm your spouse’s information when filing jointly.
Step 4: Fill out Part II through Part IV
You complete Part II for Earned Income Credits and qualifying children, Part III for Child Tax Credits and Additional Child Tax Credits, and Part IV for education credits. You ensure each child listed meets residency and age requirements.
Step 5: Attach the form to your return
You attach Form 8862 to your tax return and include Schedule EIC if claiming the Earned Income Credit. You submit the return electronically or by mail, depending on your filing preference.
Learn more about federal tax filing through our IRS Form Help Center.
Common Mistakes and How to Avoid Them
- Incorrect tax year entry: Some taxpayers enter the previous year instead of the most recent tax year. You can avoid this mistake by confirming the correct due dates and reviewing your completed form before filing.
- Missing required attachment: Some taxpayers forget to attach Form 8862 when credits were previously disallowed. You can prevent this issue by reviewing the IRS instructions and confirming that all required additional statements are included.
- Incorrect residency calculations: Many filers incorrectly calculate the number of days a child lived with them. You can avoid this problem by keeping detailed records that show the child lived with you for more than half the year.
- Invalid Social Security Numbers: Claims are denied when a child listed lacks a valid Social Security Number. You can prevent this by checking that each child meets identification requirements before claiming certain credits.
- Filing during restricted periods: Some taxpayers file while under a reckless or intentional disregard ban. You can avoid this by reviewing IRS correspondence to confirm whether a final determination restricts you from claiming credits.
- Missing spouse’s information: Joint filers sometimes skip information required for a joint return. You can prevent delays by ensuring your spouse’s information is complete and consistent with IRS records.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
Your return moves through IRS processing, where the agency reviews your eligibility for certain credits and verifies information such as earned income, residency, and qualifying children. The IRS may request documentation when questions arise about temporary absences, kidnapped children, or support rules.
Some refunds involving the Earned Income Credit or refundable Child Tax Credit take longer because the IRS must confirm eligibility before releasing withheld income tax or estimated tax paid. You receive approval, a request for more information, or a denial based on your submission.
FAQs
How does Form 8862 2018 affect my ability to claim certain credits?
Form 8862 2018 allows you to claim certain credits again after they were previously disallowed. The IRS uses the form to verify eligibility based on residency, age, support, and identification rules.
Why does Form 8862 apply when more than one person claims a child?
Form 8862 applies because the IRS uses tie-breaker rules when more than one person claims the same qualifying child. These rules determine which taxpayer can receive the credit.
How does Form 8862 help with income credit and earned income issues?
Form 8862 helps the IRS verify earned income and qualifying child information for income credit claims. It ensures your return meets eligibility rules for the Earned Income Credit EIC benefits.
How does Form 8862 relate to the credit for other dependents?
Form 8862 is required when the credit for other dependents was previously denied for reasons unrelated to clerical error. The form verifies that the dependent meets the support and residency requirements.
Why is Schedule EIC sometimes required when I file Form 8862?
Schedule EIC is required when you claim the Earned Income Credit and list qualifying children. The schedule provides additional residency and support information needed to process your return.