(IRS) Form 8862 instruction 2017/2018

What is form 8862?

The form „Information to Claim Earned Income Credit after Disallowance” has to be filed by the taxpayers, who want to claim the earned income credit after they had it denied or reduced since the year 1996, and the reduction does not stem from a clerical or math error.

The Earned Income Credit is a type of tax credit for workers, who obtain low income. They are entitled to reduce the amount of tax that is due from them and they may even get a refund from the Internal Revenue Service. However, there are certain conditions and requirements low-income workers have to fulfil in order to benefit from these regulations. First of all, they need to have a valid Social Security Number and enter into an employment relationship during the year. If they have a spouse, they need to file the form together. Such taxpayers also have to be legally enabled to stay in the United States of America throughout the year. And in addition, the income they have earned during the year cannot exceed certain amounts specified in the guidelines.

Who cannot claim Earned Income Credit

Although the taxpayer may fulfil all the conditions and requirements for claiming the Earned Income Credit, still there are situations when they will not be allowed to file the Form 8862.

This prohibition applies to taxpayers, whose Earned Income Credit was denied or reduced, because they recklessly or intentionally disregarded the EIC requirements. In this case the taxpayers are prohibited from filing the IRS Form 8862 and claiming the EIC for two years. The ban also applies if the taxpayer’s Earned Income Credit was denied or reduced due to the fraud. In this case, the taxpayer is prohibited from filing the form for ten years.

How to get and where to mail IRS Form 8862?

The Internal Revenue Service Form 8862 has to be attached to the tax return submitted by the taxpayer to the proper Service Center. All the data of IRS centers are listed on the website of the IRS. The form can be downloaded also from the same website.

Where is Form 8862 on TurboTax?

In order to file the Form 8862, the taxpayer has to sign in to their TurboTax and select the button “Take me to your return”, then search for 8862, choose Jump to 8862 and click Continue. As a result, the taxpayer can fill in the form.

Form 8862 instructions 2017/2018

The Form 8862 consists of five parts, but not all of them must be completed by every filer. In part I, the taxpayer has to first provide the year, for which the form is submitted, and tick the box that applies to the credit the taxpayer wants to claim. The box that is checked by the taxpayer determines the further parts of the form they must fill in.

If the taxpayer has checked the box “Earned Income Credit”, they have to complete Part II of the form. In this part, they first have to state whether their Earned Income Credit was denied or lowered due to the fact that they have incorrectly reported the income they earned or their investment income. If the answer is positive, the taxpayer does not have to fill out the remaining field of Part II. But if they answered “No”, they also have to state if they could be claimed as a qualifying child of a different taxpayer for the year they provided at the beginning of the form. If the taxpayer claims the EIC with a qualifying child, they are required to complete Section A. If not, they are required to complete Section B.

A qualifying child is the taxpayer’s daughter, son, stepsister, stepbrother, half sister or half brother or their descendant (e.g. grandchild, niece or nephew of the taxpayer), who has not turned nineteen during the year the form relates to and is younger than the taxpayer, or the age of twenty four if the child is a student, however, the student also has to be younger than the taxpayer. If the person is totally and permanently disabled, they can be at any age.

In the Section A of Part II of the form 8862, the taxpayer has to provide the names of the qualifying children with whom they are claiming the EIC. Then they have to give the number of days, during which each child lived with the taxpayer during the year for which the form is filed. However, if the number of days is smaller than 183 or 184 for a leap year, this child cannot be included on the form. In the case the child was born or died within the year for which the form is filed, the taxpayer has to give the exact date of birth and/or death of the child.

The Section B refers to the filers, who submit the form without a qualifying child or children. They have to provide the number of days of the year for which the form is filed, when their main home was in the United States of America, and if they have a spouse, also the number of days their spouse’s main home was in the U.S. However, if the number of days entered will be lower than 183 or 184 in the case of a leap year, the EIC cannot be claimed by that taxpayer. Next, the taxpayer has to give their and their spouse’s age at the end of the year for which the form is submitted, since the EIC can be claimed only by the people, whose age at this time falls within the range od twenty five to sixty five. And the last question of this part, included in line 11, relates to the situation when the taxpayer or their spouse has been claimed a dependent on the return of another taxpayer. In that case, they cannot claim the Earned Income Credit.

Part III must be filled in by those, who checked the box “Child Tax Credit and Additional Child Tax Credit” in Part I. Here again, we have to provide the names of the children for whom we are claiming either the child tax credit or additional child tax credit. We are entitled to submit the form only for the child who are our daughter, son, stepchild, foster child, sister, brother, stepsister, stepbrother, half sister or brother, or their descendant, and they were under the age of seventeen when the year for which the form is submitted finished, is claimed as a dependent on the return and does not submit a joint return for the year. What is more, such a child has to be a U.S. national, citizen or resident alien. If the child fulfils the abovementioned conditions, that allow them to be considered as a qualifying child, and lived with the taxpayer for at least half of the year, the form can be filed for them.

If the taxpayer has checked the box “American Opportunity Tax Credit” in Part I, they have to complete the fields in part four of the form 8862. The type of tax credit can be claimed by the taxpayer who has paid qualified education expenses of the eligible student. An eligible students is a person, whose expenses were not used to figure the AOTC during the four preceding years, had not finished the first four years of secondary education before the year for which the form is filed, and in the academic period, which began in the year stated at the beginning of the form, the student was enrolled in a program, at least half-time, which leads to the certificate or degree or another educational credential.

In case we want to apply for the American Opportunity Tax Credit, we have to enter the name of student(s) for whom we claim it, and answer, whether they fulfil the conditions applying to eligible students. The taxpayer also has to state, whether the student received a form 1098-T from an institution either in the year entered at the beginning of the form or a preceding year.

If the child is a qualifying child of more than one person, the taxpayer also has to complete Part V. In this part the name of the child has to be given, as well as the address at which the taxpayer and their child lived together during the year for which the form is filed. If the location has been changed during that year, all addresses have to be provided. The details of a maximum number of three children can be entered on the form 8862, if there are more of them, the taxpayer has to enclose an additional statement for the remaining children.

Even if a child can be a qualifying child of more than one person, only one of them can treat the child as a qualifying child for taking the Earned Income Credit, Child Tax Credit, Additional Child Tax Credit or American Opportunity Tax Credit. How to specify who should claim the credits? According to the IRS, it can be claimed by the parent of the child, or the parent with whom the child lived for a longer period of time during the year. However, if the child lived for exactly the same amount of time with both parents, the person who has the highest adjusted gross income for the year will have the child treated by the Internal Revenue Service as a qualifying one. In the form 8862, the taxpayer has to provide the relationship to each child included on the form.

The taxpayer is always responsible for the information they provide on the tax return and the form 8862. In case they make a mistake in any of these documents, it may have certain consequences. First of all, the payment of the refund or the part thereof will be delayed until the mistake is corrected. However, there are no penalties for the failure to file the form 8862, even if the taxpayer is eligible to claim the refund.

The taxpayer does not have to fill in and submit the Form 8862, if they fulfil all the requirements of the credits and they are taking the EITC without the qualifying child, and the EITC was denied or lowered because the taxpayer included on the form the child that could not have been treated as a qualifying child or the taxpayer has obtained a CP 74 notice or a letter from the Internal Revenue Service that they are recertified.

Every taxpayer, who wishes to claim the credit should check the requirements that they have to meet in order to get the refund every year. The reason is that the criteria change from year to year, and even if we were eligible to obtain it in the previous years, it may happen that we do not fulfil the conditions anymore. In order to be up to date with the requirements, we have to see the article 32 of IRC and the Publication 17 for the year, for which we want to submit the form.

Form 8862 Example:

(IRS) Form 8862 instruction

form 8862 example




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