To determine whether your Earned Income Credit (EIC) was disallowed or reduced in a prior year, you should review your past tax records and any IRS notices you received. The IRS will notify you if your EIC was denied, reduced, or restricted.
Key Indicators That Your EIC Was Disallowed
IRS Notice or Letter:
- The most reliable indicator is an IRS notice specifically stating your EIC was disallowed or reduced
- Common notices include audit or examination letters (such as CP75 or similar correspondence) explaining the reason for disallowance
Form 8862 Requirement:
- If you are required to file Form 8862, this indicates your EIC was previously disallowed for a reason other than a math or clerical error.
Disallowance Period:
- If the IRS determined:
- Reckless or intentional disregard → 2-year ban
- Fraud → 10-year ban
- During this period, you cannot claim the EIC
Prior-Year Tax Return Review:
- Check if:
- Your originally claimed EIC amount differs from the final processed return
- Adjustments were made by the IRS removing the credit
What Does NOT Automatically Indicate Disallowance
- A delayed refund alone
- General IRS notices unrelated to EIC eligibility (e.g., income matching notices)
What to Do If Your EIC Was Disallowed
File Form 8862 (if required):
- You must attach Form 8862 to your return to reclaim the EIC after a prior disallowance, unless an exception applies
Check Current Eligibility:
- You must still meet all EIC rules, including:
- Valid Social Security Number
- Earned income and AGI limits
- Filing status requirements
Source:
Publication 596 (2025), Disallowance of the EIC
Form 1040 Instructions (EIC Section)
Disclaimer: Always verify information with the current Federal or State Department of Revenue Forms and Instructions. Tax rules may change annually, and professional advice from a CPA or tax attorney is recommended for complex situations.