What is Form 8862?
If the IRS previously disallowed your Earned Income Credit (EIC), Child Tax Credit (CTC/ACTC/ODC), American Opportunity Credit (AOTC), or Child and Dependent Care Credit (CDCC), you must file Form 8862 to reclaim these credits. Each credit has its own section with eligibility questions.
SupportedKey Parts
| Part | Credit | What it gates |
|---|---|---|
| Part I | Earned Income Credit (EIC) | Schedule EIC computation |
| Part II | Child Tax Credit / ACTC / ODC | Form 8812 computation |
| Part III | American Opportunity Credit (AOTC) | Form 8863 Part I |
| Part IV | Child and Dependent Care Credit (CDCC) | Form 2441 computation |
How PaisaTax Handles It
- Manually added when the taxpayer had a prior-year credit disallowance
- Gating mechanism: Each part produces an
allowedboolean. IfisRequired = false(no prior disallowance), the credit is automatically allowed. IfisRequired = true, the preparer must answer eligibility questions to unlock the credit. - Downstream effect: If a credit is not allowed by Form 8862, PaisaTax zeros out the corresponding credit computation.
Common Situations
- First-time claim after disallowance: The IRS sent a notice disallowing EIC. The taxpayer must file Form 8862 with the next return claiming EIC.
- Multiple credits disallowed: Each credit has its own section — you only need to complete the parts that apply.
- No prior disallowance: If no credits were previously disallowed, Form 8862 is not needed. All credits compute normally.