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Tax credits like the additional child tax credit can provide parents with a valuable tax break to help with the costs that come with raising kids. But you’ll need to submit the right forms in order to claim the credit.
If you qualify for the additional child tax credit, it could put up to $1,400 per qualifying child back in your pocket come tax time — but you’ll have to follow the rules for claiming it. To claim this credit, you’ll need to complete Schedule 8812 and file it with your Form 1040 federal income tax return.
Let’s walk through Schedule 8812 and learn how to complete it.
Schedule 8812 is the form used to claim the additional child tax credit. Understanding the additional child tax credit begins with the child tax credit. Starting with the 2018 tax year, the child tax credit is worth up to $2,000 per qualifying child.
Like all tax credits, the child tax credit reduces your tax bill on a dollar-for-dollar basis. A portion of the child tax credit is refundable as the additional child tax credit. Up to $1,400 of the credit is refundable, meaning if the credit reduces the amount of federal income tax you owe to zero, you can get all (or some) of the excess credit back as a refund.
If you meet the qualifications for claiming the additional child tax credit, you’ll need to complete and file Form 8812.
Learn more about refundable tax credits and how they work.
Schedule 8812 is pretty straightforward. And unlike some other tax forms, it’s a single-page document. Here’s the information requested on each line of the form.
Note that these instructions assume you file Form 1040. If you file using Form 1040-NR or 1040-SR (the tax form for seniors), check out the IRS Instructions for Schedule 8812.
And note that this walk-through is based on the updated 2020 version of Schedule 8812 available as of December 2020.
- Line 1 — Both IRS Publication 972 and the Instructions for Form 1040 include a Child Tax Credit and Credit for Other Dependents Worksheet to help determine whether you qualify to claim the CTC or the ACTC and calculate the amount of the credit. Enter the amount from Line 10 of the Child Tax Credit and Credit for Other Dependents Worksheet in Publication 972 or Line 8 of the worksheet in the Form 1040 Instructions above.
- Line 2 — Enter the amount from Form 1040, Line 19. This is the nonrefundable amount of the child tax credit that you were able to claim. And it’s important to note that you may also need to file Form 8862 to claim the child tax credit.
- Line 3 — Subtract the amount from Line 2 from the amount on Line 1. If the result is zero, you claimed the full child tax credit and no portion is refundable, so you don’t need to file Schedule 8812.
- Line 4 — Enter the number of qualifying children you have multiplied by $1,400 (the portion of the child tax credit that’s refundable). This should be the same number of children used for Line 1 of the Child Tax Credit and Credit for Other Dependents Worksheet.
- Line 5 — Enter the smaller amount of Line 3 or Line 4.
- Line 6a — This is where you’ll include earned income. This amount comes from the Earned Income Chart included in the Instructions for Schedule 8812. It depends on whether you have earnings from self-employment and whether you’re claiming the earned income credit, or EIC. Review the chart and enter the result here.
- Line 6b — If you (or your spouse, if married filing jointly) received any nontaxable combat pay, include it here. If you have nontaxable combat pay, you should find the amount on your Form W-2 that you received from your military employer. It will be in in Box 12 of the form with code Q.
- Line 7 — Check “Yes” or “No” to indicate whether the amount on Line 6a is more than $2,500. (You must have at least $2,500 in earned income to claim the additional child tax credit.) If you answer no, you’ll leave Line 7 blank and enter a zero on Line 8. If the amount on Line 6a is more than $2,500, you’ll subtract $2,500 from the amount on Line 6a and enter the result on Line 7.
- Line 8 — Multiply the amount on Line 7 by 0.15 and enter the result here. Then, check “Yes” or “No” to indicate whether the amount on Line 4 is $4,200 or more. It will be $4,200 or more if you can claim three or more qualifying children. At this point, you’ll take one of the following four steps.
- If Line 4 (the number of qualifying children you have multiplied by $1,400) is not $4,200 or more and Line 8 is zero, you can’t claim the credit.
- If Line 4 is not $4,200 or more and Line 8 is greater than zero, skip Part II and enter the smaller of Line 5 or Line 8 on Line 15.
- If Line 4 is $4,200 or more and Line 8 is equal to or more than Line 5, skip Part II and enter the amount from Line 5 on Line 15.
- If Line 4 is $4,200 or more and Line 8 is less than Line 5, continue on to complete Part II.
You only need to complete this section if you’ve determined it’s necessary by following the instructions for Line 8 above. The draft form notes that this section is for certain filers who have three or more qualifying children.
- Line 9 — Enter your (and your spouse’s, if married filing jointly) withheld Social Security, Medicare and Additional Medicare taxes from Forms W-2, Boxes 4 and 6. The Line 9 Worksheet from the Instructions for Schedule 8812 can help with your calculations.
- Line 10 — Enter the total from Schedule 1, Line 14 (the deductible portion of any self-employment tax you paid) and Schedule 2, Line 5 (unreported Social Security and Medicare tax you paid), plus any taxes that you identified using code UT on Schedule 2, Line 8.
- Line 11 — Add Lines 9 and 10 and enter the result here.
- Line 12 — Enter the total amount from Form 1040, Line 27 (earned income credit) and Schedule 3, Line 10 (excess Social Security and tier 1 RRTA tax withheld).
- Line 13 — Subtract Line 12 from Line 11. If zero or less, enter zero.
- Line 14 — Enter the larger of Line 8 or Line 13, then enter the smaller of Line 5 or Line 14 on Line 15.
- Line 15 — This is your additional child tax credit. Enter the amount shown here on Form 1040, Line 28.
While it’s a relatively simple form, when done by hand, Schedule 8812 requires several calculations and checks between different schedules, forms and worksheets. DIY tax software may help make completing the form and claiming the additional child tax credit easier. Credit Karma Tax®, a free online tax preparation and filing service, can help you complete Schedule 8812, as well as most common forms and schedules.
Whether you e-file yourself or work with a paid preparer, claiming the child tax credit and additional child tax credit will take some work on your part. But the opportunity to reduce the amount of tax you owe and possibly increase a tax refund may make it worth the effort to claim the credits if you’re eligible for them.
Troy Grimes is a tax product specialist with Credit Karma Tax®. He’s worked in tax, accounting and educational software development for nearly 30 years. He has a bachelor’s degree in business administration with an emphasis in business analysis from Texas A&M University. You can find him on LinkedIn.