What this line means
Which credit the IRS previously disallowed or reduced on your return. You check the box for each credit you want to reclaim: the Earned Income Credit (EIC), the Child Tax Credit (CTC), the Additional Child Tax Credit (ACTC), the Credit for Other Dependents (ODC), or the American Opportunity Tax Credit (AOTC). 1 This tells the IRS which parts of Form 8862 you need to complete.
Does this apply to you?
- You received a notice (such as CP27 or CP79) from the IRS stating that your EIC, CTC, ACTC, ODC, or AOTC was reduced or disallowed
- You want to claim one or more of those credits again on a future return
- You had a credit denied due to an error on a prior return and have since corrected the issue
Easy to overlook
You need Form 8862 only once after each disallowance After the IRS denies your credit, you file Form 8862 with the next return where you claim that credit. You do not need to file it every year after that — only the first time you reclaim the credit following the disallowance. 1 Many filers attach it year after year unnecessarily. IRS Form 8862 Instructions — Information To Claim Certain Credits After Disallowance
A disallowance for one credit does not block the others If the IRS denied your EIC but never touched your CTC, you only check the EIC box and complete Part II. You do not need to re-prove eligibility for credits that were never disallowed. 2 Filers sometimes assume that a single denial letter means all credits are frozen. IRS Notice CP27 — EIC disallowance notice
Watch out for this
Do not skip Form 8862 when reclaiming a previously denied credit. If you leave it off, the IRS will automatically reject the credit again — even if you now qualify. The form is your proof that you have reviewed the eligibility rules and meet them. Attach it to the same return where you claim the credit.
Footnotes
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IRS Form 8862 Instructions, Information To Claim Certain Credits After Disallowance. https://www.irs.gov/instructions/i8862 ↩ ↩2
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IRS Notice CP27, We Didn’t Allow Your Earned Income Credit. https://www.irs.gov/individuals/understanding-your-cp27-notice ↩