What this line means
Whether you now meet all the requirements for the credit that was previously disallowed. You answer “Yes” or “No.” 1 A “Yes” means you have reviewed the eligibility rules and confirm that your current-year situation qualifies you. A “No” means you should not file Form 8862 — you cannot reclaim a credit you still do not qualify for.
Does this apply to you?
- You had a credit denied by the IRS and your circumstances have changed so you now meet the eligibility rules
- You made an error on a prior return (wrong filing status, incorrect dependent information) and have corrected it
- You were previously ineligible due to income but your income has since dropped below the threshold
Easy to overlook
Your disallowance letter explains exactly what went wrong IRS notices like CP27 (EIC) or CP79A (fraud-related ban) spell out the specific reason your credit was denied. 2 Line 2 is not asking a vague question — it asks whether you have fixed that specific problem. Read the original notice before answering. IRS Publication 596 — Earned Income Credit
A two-year or ten-year ban overrides this form If the IRS determined your credit claim was due to reckless disregard of the rules, you face a two-year ban. If the denial was due to fraud, the ban is ten years. 1 During the ban period, you cannot file Form 8862 to reclaim the credit — the form does not override the penalty period. IRS Form 8862 Instructions — Information To Claim Certain Credits After Disallowance
Watch out for this
Answering “Yes” on line 2 when you have not actually verified eligibility. The IRS treats Form 8862 as a signed statement that you meet every requirement. If you check “Yes” and still do not qualify, the IRS will deny the credit again and the two-year or ten-year ban clock restarts. Double-check the specific rules for each credit before filing.
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 Publication 596, Earned Income Credit. https://www.irs.gov/pub/irs-pdf/p596.pdf ↩