Schedule 8812: How to Claim Child Tax Credit, Additional Child Tax Credit, and Credit for Other Dependents

Overview of What is Schedule 8812 and its Purpose

Primary Function

• Schedule 8812 is used to calculate the Child Tax Credit (CTC), Credit for Other Dependents (ODC), and Additional Child Tax Credit (ACTC) on Form 1040.
• It helps taxpayers determine the amount of credit they are eligible for based on qualifying children and dependents.
• The form includes worksheets and instructions to compute credits accurately, considering modified adjusted gross income (AGI) and other eligibility criteria.
• It ensures compliance with IRS rules, including the requirement for a valid Social Security Number (SSN) to claim CTC or ACTC.
• Refunds from ACTC are not counted as income or resources for 12 months when determining eligibility for federal or federally-funded assistance programs like Medicaid or TANF.

Who Needs to File Schedule 8812?

Purpose of Form

• Schedule 8812 is used to calculate the Child Tax Credit (CTC), Credit for Other Dependents (ODC), and Additional Child Tax Credit (ACTC).
• It is attached to Form 1040, 1040-SR, or 1040-NR to claim these credits based on qualifying dependents.

Who Must File

• Taxpayers who have qualifying children under age 17 at the end of the tax year and wish to claim the CTC or ACTC must file Schedule 8812.
• Taxpayers with dependents who are 17 or older, or who do not qualify for CTC/ACTC, may file to claim the ODC.
• Only taxpayers who meet the eligibility requirements for these credits need to file this form.

Filing Requirements

• Both the taxpayer and spouse (if filing jointly) must have a valid SSN issued before the due date of the return to claim CTC or ACTC.
• Qualifying children must have a valid SSN issued before the due date of the return to be used for CTC or ACTC.
• For ODC, dependents must have an SSN, ITIN, or ATIN issued on or before the due date of the return.
• If a qualifying child was born and died in the tax year without an SSN, attach birth/death records to support the claim.
• Improper claims due to reckless disregard or fraud may result in disallowance of credits for 2 or 10 years, respectively.
• Form 8862 may be required if a credit was previously denied or reduced for reasons other than math or clerical errors.

General Instructions

• Complete Form 1040/1040-SR/1040-NR through line 27a (or line 26 for 1040-NR) and Schedule 3, line 11 before completing Schedule 8812.
• Do not claim ACTC if filing Form 2555.
• The refund from ACTC cannot be counted as income or resources for welfare programs like TANF, Medicaid, SSI, or SNAP for at least 12 months after receipt.
• Modified AGI (used for phase-out limits) is calculated on line 3 of Schedule 8812.

Key Sections Schedule 8812: Important parts of the form and what they cover

Part I — Child Tax Credit and Credit for Other Dependents

• Line 1 – Enter the amount from line 11a of Form 1040, 1040-SR, or 1040-NR.
• Line 2a – Enter income from Puerto Rico that you excluded.
• Line 2b – Enter amounts from lines 45 and 50 of Form 2555 (foreign earned income).
• Line 2c – Enter amount from line 15 of Form 4563 (income from American Samoa, Guam, etc.).
• Line 2d – Total of lines 2a through 2c.
• Line 3 – Add line 1 and line 2d.
• Line 4 – Number of qualifying children under age 17 with valid Social Security numbers.
• Line 5 – Multiply line 4 by $2,200 (maximum Child Tax Credit per qualifying child).
• Line 6 – Number of other dependents (children not under 17 or without required SSN, plus other dependents).
• Line 7 – Multiply line 6 by $500 (credit for other dependents).
• Line 8 – Add lines 5 and 7 (total potential credit).
• Line 9 – Enter income threshold: $400,000 for married filing jointly, $200,000 for all others.
• Line 10 – Subtract line 9 from line 3. Round up to next $1,000 if not a multiple of $1,000. Enter zero if negative.
• Line 11 – Multiply line 10 by 5% (0.05) to calculate the reduction.
• Line 12 – Compare line 8 and line 11:
  • If line 8 ≤ line 11 → No credit allowed, stop here.
  • If line 8 > line 11 → Subtract line 11 from line 8.
• Line 13 – Enter amount from Credit Limit Worksheet A (adjusted credit limit).
• Line 14 – Enter the smaller of line 12 or line 13: this is your Child Tax Credit and Credit for Other Dependents.
  • Report this amount on Form 1040 line 19.
  • If line 12 > line 14, may qualify for Additional Child Tax Credit in Part II.

Part II-A: Additional Child Tax Credit (ACTC) for All Filers

1. Line 15 – Reserved for future use.
2. Line 16a – Subtract line 14 from line 12. If zero, no ACTC.
3. Line 16b – Multiply number of qualifying children (same as line 4) by $1,700.
4. Line 17 – Enter the smaller of lines 16a or 16b.
5. Line 18a – Enter earned income (see instructions).
6. Line 18b – Enter nontaxable combat pay (if any).
7. Line 19 – If line 18a > $2,500, subtract $2,500. Otherwise enter zero.
8. Line 20 – Multiply line 19 by 15% (0.15).

• Next, check if line 16b ≥ $5,100:
  • No → Bona fide Puerto Rico residents go to Part II-B; others skip to line 27.
  • Yes → If line 20 ≥ line 17, skip Part II-B; otherwise, continue to line 21.

Part II-B—Certain Filers Who Have Three or More Qualifying Children and Bona Fide Residents of Puerto Rico

• Line 21 – Withheld Social Security, Medicare, and Additional Medicare taxes (include spouse’s if MFJ).
• Line 22 – Sum of certain taxes from Schedules 1 and 2 (Form 1040).
• Line 23 – Add lines 21 and 22.
• Line 24 – Enter totals from Form 1040 line 27a + Schedule 3 line 11 (1040/1040-SR) or Schedule 3 line 11 (1040-NR).
• Line 25 – Subtract line 24 from line 23; enter zero if negative.
• Line 26 – Enter the larger of line 20 or 25.
• Next, enter the smaller of line 17 or 26 on line 27.

Part II-C: Additional Child Tax Credit

• Line 27 – This is your Additional Child Tax Credit. Enter on Form 1040 line 28.

What's New for Schedule 8812: Recent Tax Law Changes and Updates for the Current Year

CTC Amount Increased

• The maximum amount of the Child Tax Credit (CTC) for each qualifying child has increased to $2,200.

Social Security Number Required to Claim the Child Tax Credit (CTC) and Additional Child Tax Credit (ACTC)

• Beginning in tax year 2025, a valid Social Security Number (SSN) is required to claim the CTC or ACTC. For joint returns, only one filer needs an SSN; the other may have an SSN or ITIN, provided it was issued on or before the return’s due date.

Trump Accounts and New Form 4547

• Recent legislation allows parents, guardians, or authorized individuals to establish a new type of retirement account called a Trump account for children born between 2025 and 2028. A $1,000 pilot program contribution may be made to the child’s Trump account. These elections can be made on Form 4547, which is filed with the 2025 income tax return.

Taxpayers Affected by Schedule 8812 Updates

Key Changes Impacting Taxpayers

• Increased Child Tax Credit (CTC): The maximum CTC amount for each qualifying child has increased to $2,200, affecting all eligible taxpayers claiming this credit.
• SSN Requirement for CTC and ACTC: Beginning in tax year 2025, taxpayers must have a valid Social Security Number (SSN) to claim the CTC or Additional Child Tax Credit (ACTC). For joint returns, only one spouse needs an SSN; the other may use an ITIN if issued before the return’s due date.
• Trump Accounts and Form 4547: Parents or guardians of children born between 2025 and 2028 may establish a new “Trump account” and elect a $1,000 pilot contribution, with elections made on Form 4547 filed with the 2025 tax return.
• Form 8862 Requirement: If a CTC, ACTC, or ODC was previously denied or reduced (excluding math/clerical errors), taxpayers must attach Form 8862 to claim these credits again unless an exception applies.

Example Scenario Showing How the Schedule 8812 Changes Apply

CTC amount increased.

• John and Maria, residents of Austin, Texas, file a joint return for tax year 2025. They have two qualifying children: Emma (age 8) and Liam (age 5). Their modified adjusted gross income (MAGI) is $85,000, which is below the phase-out threshold for the Child Tax Credit (CTC).
• Previously, the maximum CTC per child was $2,000. For 2025, the maximum increased to $2,200 per qualifying child.
• As a result, John and Maria can now claim $2,200 for Emma and $2,200 for Liam, totaling $4,400 in CTC, which is $400 more than they could claim in prior years.
• The increase directly benefits families with children under 17, providing more financial relief without affecting their eligibility or MAGI phase-out limits.

Social security number (SSN) required to claim the child tax credit (CTC) and additional child tax credit (ACTC).

• Sarah, a single mother in Seattle, Washington, files her 2025 tax return with her 10-year-old daughter, Chloe. Sarah has a valid SSN, but Chloe’s SSN was issued after the tax return due date (April 15, 2026).
• Beginning in tax year 2025, a valid SSN must be issued on or before the due date of the return to claim the CTC or ACTC. Since Chloe’s SSN was issued after the due date, Sarah cannot claim the CTC for Chloe.
• If Sarah had filed before April 15, 2026, and Chloe’s SSN was already issued, she would have been eligible. However, because the SSN was issued too late, the credit is disallowed for Chloe.
• This rule ensures timely verification of dependents and prevents claims based on incomplete or late-issued identification.

Trump accounts and new Form 4547.

• David and Lisa, parents in Chicago, Illinois, file their 2025 tax return and have a newborn daughter, Mia, born in January 2025. They wish to establish a Trump account for Mia under the new pilot program.
• Under recent legislation, parents may elect to establish a Trump account for children born between 2025 and 2028. David and Lisa can file Form 4547 with their 2025 return to elect this benefit.
• By filing Form 4547, they can receive a $1,000 pilot program contribution to Mia’s Trump account. This contribution is made directly to the account and is not taxable to David or Lisa.
• The Trump account is designed to grow tax-free for the child’s future use, such as education or healthcare expenses. David and Lisa must meet eligibility requirements and file Form 4547 by the tax return deadline to claim this benefit.

Related Schedules and Forms for Schedule 8812

Form 1040

• Used to report income and calculate tax liability; Schedule 8812 requires amounts from line 11a and specific lines from Schedule 1 and Schedule 2.

Form 1040-NR

• For nonresident aliens; Schedule 8812 requires amounts from line 11a and specific lines from Schedule 3.

Form 2555

• Used to claim foreign earned income exclusion; filing this form prevents claiming the additional child tax credit on Schedule 8812.

Form W-2

• Reports wages and withheld taxes; Schedule 8812 uses social security, Medicare, and Additional Medicare taxes from boxes 4 and 6.

Form 8862

• Required if claiming CTC, ACTC, or ODC after a prior denial or reduction (not due to math/clerical error).

Common Mistakes to Avoid on Schedule 8812

• Incorrect or missing Social Security Numbers (SSNs): Failing to provide a valid SSN for a qualifying child before the return due date disqualifies you from claiming the Child Tax Credit (CTC) or Additional Child Tax Credit (ACTC). If a child was born and died in the year, attach a copy of the birth or death certificate to support the claim.
• Improperly calculating earned income: Earned income must be accurately computed using the Earned Income Worksheet, including wages, statutory employee income, net profit from Schedule C or K-1, and farm profits. Omitting or misreporting these amounts affects the credit limit and may lead to disallowance.
• Incorrectly completing Credit Limit Worksheet B: If you have three or more qualifying children or are a bona fide resident of Puerto Rico, you must complete Worksheet B correctly. Errors in multiplying the number of children by $1,700 or miscalculating the 15% reduction on earned income over $2,500 can reduce or eliminate your credit.
• Missing or misattached required forms: Ensure all necessary schedules and forms (e.g., Schedule 1, Schedule 2, Schedule 3) are attached and completed as referenced in the instructions. For example, if you’re using Schedule 8812 with Form 1040, you must complete lines 27a, Schedule 2 lines 5, 6, and 13, and Schedule 3 line 11 if applicable.
• Entering amounts on wrong lines: Double-check that all figures from the Earned Income Worksheet and Credit Limit Worksheet B are entered on the correct lines of Schedule 8812. Misplacing amounts can result in incorrect credit calculations and IRS adjustments.
• Claiming credits without proper documentation: If you claim the CTC or ACTC and later it’s determined your claim was due to reckless disregard or fraud, you may be barred from claiming these credits for 2 or 10 years. Always ensure your claim is supported by accurate records and documentation.

Helpful Tips Schedule 8812: Best practices for completing this form

General Filing Tips

• Ensure all required forms are attached to your return, including copies of Forms W-2, W-2G, 1099-R, and any other documents with federal tax withheld.
• Attach related schedules and forms behind your return in the order of their sequence number.
• If you received a corrected Form W-2 (Form W-2c), attach copies of both the original and corrected forms.
• For joint returns, both spouses must sign. If one spouse cannot sign due to medical reasons, sign their name followed by "By (your name), Spouse" and include a dated statement explaining the situation and consent.
• If you are the guardian of an incapacitated spouse, you may sign as "guardian." Otherwise, a valid power of attorney (Form 2848) is required for signing on behalf of your spouse.

Extensions and Deadlines

• File Form 4868 by the original due date to request a 6-month extension to file. This does not extend the time to pay taxes owed.
• Interest and penalties may apply if taxes are not paid by the original due date.
• Automatic 2-month extensions are available for U.S. citizens and residents abroad or military personnel serving outside the U.S., but interest applies on unpaid taxes.
• For disaster-related delays, you may have up to one year to file and pay, depending on IRS guidelines.

Recordkeeping and Verification

• Maintain organized records, including receipts, canceled checks, and documents supporting income, deductions, or credits.
• Keep property records until the period of limitations expires for the year of disposal to accurately compute gain or loss.
• For business income and expenses, use a bookkeeping method that clearly reflects gross income and expenses.
• When filing electronically, ensure you have your prior year’s adjusted gross income (AGI) for verification purposes.

Source

• For more up-to-date information visit https://www.irs.gov Government website.
• Refer to the Instructions for Schedule 8812 for detailed information.