Form 8812 2022 Printable, Fillable PDF – Was it ever brought to your attention that you may be eligible to obtain the Additional Child Tax Credit by filing Form 8812, even if you do not owe any federal income taxes? You must complete Schedule Form 8812 in order to claim the amount of credit that exceeds the amount of tax you owe for the year if the total credit amount for all of your eligible children exceeds the amount of tax you owe. Consider the steps involved in preparing and submitting this form.
The Additional Child Tax Credit Has Been Modified.
Tax years previous to 2018 permitted you to claim a Kid Tax Credit of up to $1,000 for each qualified child you declared as a dependant on your tax return under the provisions of federal tax law. Beginning in 2018, the Kid Tax Credit has been doubled to $2,000 per qualified child, and the Additional Child Tax Credit allows you to claim up to $1,400 in additional credits for each qualifying child.
The effect of the stimulus on the child tax credit in 2021
Changes To The Child Tax Credit
As part of the American Rescue Plan, the maximum Kid Tax Credit for qualified children under the age of six will be increased to $3,600 in 2021, and the maximum Child Tax Credit for qualifying children aged six through seventeen will be increased to $3,000 per child. Amounts up to $2,000 were available for each qualified kid up to the year 2021. However, children under the age of 17 were not eligible for this credit.
As a result of the adjustments made to the original Child Tax Credit, the Child Tax Credit will have reduced income restrictions in 2021. The $2,000 per-child credit is still available to families that do not meet the income requirements for the credit under these new income restrictions, as long as they meet the previous child tax credit income and phase-out levels.
Aside from that, the whole credit is entirely refundable for the next year, 2021. For 2021, qualifying families will be able to receive it even if they owe no federal income tax, and they will not be required to complete IRS Form 8812, as is the case now.
Payments Of The Temporary Advance Child Tax Credit Are Now Available
The American Rescue Plan Act, which was passed in March of 2021 and extended the Child Tax Credit, has been signed into law. A component of this expansion is to provide families with the 2021 tax credit sooner rather than later by giving them direct payments throughout 2021 rather than having them wait until they submit their 2021 taxes in 2022, as is now the case. The majority of families do not have to do anything in order to get their advance payment. Most of the time, the Internal Revenue Service (IRS) will determine the payment amount based on your 2020 tax return. Families that qualify will receive advance payments, which will be sent by direct transfer or cheque.
When you prepare your 2021 tax return, the amount that you get will be compared to the amount that you are qualified for under the law. The advance payments will account for around one-half of the tax credit received by the majority of households. If you get an insufficient amount, you will be obligated to pay an extra sum on your tax return. If you get an excessive amount, you may be required to repay the excess, which will depend on your income level.
Please see our blog article on the 2021 Child Tax Credit for the most recent information and changes.
In case you’re planning on doing your taxes for the year 2020, here’s what you should know about Form 8812.
Requirement For Qualified Children
Before you may claim the Additional Child Tax Credit on Form 8812, you must determine whether or not your dependents fulfill all of the standards for eligible children under the original Child Tax Credit program. The kid may be any of the following:
- Siblings by blood or by step
- Foster children or the offspring of any of the individuals listed above (such as a niece or grandchild)
The kid must not be older than 17 at any point during the tax year, and they must not be responsible for more than 50% of their own financial support. Finally, any kid for whom you are claiming a credit must have resided with you for more than half of the tax year in order to qualify. But even if your kid fits all of the criteria, you won’t qualify for the credit until you claim an exemption for each of them on your tax return; just being eligible to claim the child is inadequate proof of eligibility for the benefit.
Exceptions To The Necessity Of Having An Eligible Child
The Internal Revenue Service provides a few exceptions to the requirement that your kid reside with you for more than half of the tax year. This covers any kid who was born but later died during the same tax year, as long as your residence was the place where the child resided at the time of death.
When your kid is away at school or in a juvenile detention facility, or when you are away on business, undergoing medical treatment, or serving on active duty in the military, the IRS considers your child to be living with you for tax purposes. A noncustodial parent may also claim the credit if the custodial parent agrees not to claim the credit or to claim an exemption for the child while the child is in his or her custody.
Income Restrictions Apply
If you fulfill all of the other conditions, but your tax liability at the end of the year is either zero or a sum that is less than the credit, you will not be able to claim the entire $2,000 Child Tax Credit as you would otherwise. If you complete Form 8812 and attach it to your Form 1040, you may be eligible for a reduced Additional Child Tax Credit if your income is below a certain threshold.
A reduction in the credit may be applied to the majority of taxpayers if their adjusted gross income is greater than the level that is applicable to their filing status. Consider the following scenario: If you file as a single, head of household, married filing separately, or qualifying widow (er) taxpayer for the 2020 tax year and have more than $200,000 in adjusted gross income ($400,000 for joint filers), the credit diminishes proportionally to the amount of income that exceeds the limit.
You Must Be Able To Demonstrate Earned Income
The amount of gross income that you earn must be taken into consideration while preparing Form 8812 and calculating the child tax credit that you are entitled to receive. This sum will be put on line 6a of the worksheet. Your earned income includes any revenue you get from a job or from actively participating in a business venture. Generally speaking, it excludes the majority of the taxable income you make from investments, such as interest earned on a savings account or profits earned from stock trading throughout the course of the year. Unemployment payments are also not included as earned income in this calculation.
Additionally, on December 27, 2020, the Consolidated Appropriations Act (CAA) was passed into law as a stimulus package to give assistance to people who have been impacted by the epidemic. For tax year 2020, the CAA permits taxpayers to utilize their 2019 earned income if it was greater than their 2020 earned income in computing the Additional Child Tax Credit as well as the Earned Income Tax Credit if their earned income was higher than their 2020 earned income (EITC).
How To Complete And Submit Form 8812
To begin, fill out the Child Tax Credit and Credit for Other Dependents Worksheet that corresponds to your situation on the IRS website. Line 19 of your Form 1040 has the directions for completing this section. If you qualify for the additional child tax credit, you’ll need to complete Form 8812 and attach it to your Form 1040, which you’ll submit with your tax return.
You’ll need to utilize Form 8812 to figure out how much of an additional child tax credit you’re entitled to. This form is divided into three sections:
- Part I of the filing process should be completed by all filers. In Part I, you’ll enter the amounts of your child tax credit and any earned income that you received.
- Filers who have three or more qualified children will only be required to complete Part II of the form. Form 8812 includes a worksheet that may be used to compute the amount submitted in Part II, line 9. The worksheet can be found by clicking here.
- Part III outlines the amount of the Additional Child Tax Credit that you are eligible to claim. On line 28 of your Form 1040, you’ll write down the amount you received as a gift.
Take note that if you’re filing Form 8812 to claim the Additional Child Tax Credit, you may experience a delay in receiving your tax refund.
Unless it is proven that your mistake was caused by reckless or willful disregard of CTC, ODC, or ACTC regulations, you will not be allowed to claim any of those credits for two years if you claim the CTC, ODC, or ACTC in error. If the IRS concludes that the mistake was caused by fraud, you will be unable to claim any of the credits for a period of ten years after the error was discovered. You will very certainly be required to pay fines if your claims are found to be incorrect.
Remember, with TurboTax, we’ll ask you a few easy questions about your life and assist you in filling out all of the necessary tax paperwork. With TurboTax, you can be certain that your taxes will be completed correctly, whether they are basic or complicated tax returns, regardless of your circumstances.