Real-world examples of Form 8862 for tax credit claims

Starting with real examples of Form 8862 for tax credit claims

Instead of jumping straight into IRS jargon, let’s start with real-world stories. These examples of Form 8862 examples for tax credit claims mirror what many taxpayers actually face after the IRS disallows a credit.

Think of Form 8862 as your “second chance” form. When the IRS has previously denied certain credits for a reason other than math or a simple typo, they often require you to file Form 8862 before they’ll allow that credit again. The credits most often involved are:

• Earned Income Credit (EIC)
• Child Tax Credit (CTC) / Additional Child Tax Credit (ACTC)
• Credit for Other Dependents
• American Opportunity Credit (AOC)

Now let’s walk through concrete, human-sized examples.

Example of Form 8862: Single parent who lost the Earned Income Credit

Maria is a single parent with one child. A few years ago, she claimed the Earned Income Credit, but the IRS later sent her a notice saying her child did not meet the qualifying child rules. Maybe the other parent also claimed the child, or the child didn’t live with her long enough that year.

The IRS then disallowed her EIC for that tax year. On the notice, they told her that if she wants to claim the Earned Income Credit again in a future year, she must file Form 8862, Information To Claim Certain Credits After Disallowance.

Fast-forward to the current tax year:

• The child has lived with Maria all year.
• The other parent is no longer claiming the child.
• Maria clearly meets the EIC rules now.

Because of that earlier disallowance, Maria must attach Form 8862 to her current tax return when she claims the Earned Income Credit again. This is one of the best examples of Form 8862 examples for tax credit claims: the taxpayer fixed the issue, meets the rules now, and uses the form to show the IRS she’s back in compliance.

If she forgets to file Form 8862, the IRS can simply deny the EIC again for that year, even though she actually qualifies. The problem wouldn’t be her eligibility — it would be the missing form.

Example of Form 8862: Child Tax Credit denied for residency issues

Now picture Jamal, who claimed the Child Tax Credit for his son last year. The IRS audited his return and decided his son did not live with him for more than half the year. Because of that, they disallowed the Child Tax Credit, and the notice told him he’d need Form 8862 if he wanted to claim that credit again.

This year, the facts are different:

• The child has lived with Jamal for 10 months.
• Jamal has school records and a lease showing his son’s address.
• His income is within the allowed range for the Child Tax Credit.

He absolutely qualifies for the credit this time. But because of the past disallowance, he must:

• Complete Form 8862, answering the questions about the Child Tax Credit.
• Attach it to his federal tax return.

This is another clear example of Form 8862 examples for tax credit claims: the credit was blocked once, but the taxpayer now meets the rules and uses Form 8862 to “unlock” it.

Examples include grandparents and shared custody situations

Some of the trickiest examples of Form 8862 come from families where multiple adults are involved in raising a child.

Grandparents stepping in

Consider Linda, a grandmother who took in her granddaughter after the child’s parents split up. A few years ago, Linda tried to claim the Earned Income Credit and Child Tax Credit for the granddaughter. The IRS disallowed both credits because another relative also claimed the child.

After that, the IRS told Linda she would need to file Form 8862 before claiming those credits again.

Now, several years later:

• The granddaughter has lived with Linda all year.
• No one else is claiming the child.
• Linda has modest earned income from part-time work.

She’s ready to claim the EIC and Child Tax Credit again, and this time she’s clearly eligible. She files:

• Form 1040
• Schedules for her credits
• Form 8862 to show she’s properly claiming the credits after a prior disallowance

This is one of the best examples of Form 8862 examples for tax credit claims in multi-generational households.

Shared custody and alternating years

Now take a shared custody situation. Two parents agree to alternate years claiming their child. In Year 1, Parent A claims the child and the EIC. Parent B also tries to claim the EIC that same year, and the IRS disallows Parent B’s credit.

Two years later, it’s Parent B’s turn to claim the child legitimately under their custody agreement. Parent B now:

• Qualifies to claim the child as a dependent this year
• Qualifies for the Earned Income Credit
• Must file Form 8862 with the return because of the earlier disallowance

This is a textbook example of Form 8862 examples for tax credit claims where family arrangements change over time.

Example of Form 8862 for the American Opportunity Credit (college student)

Form 8862 isn’t just about kids and EIC. It also applies to the American Opportunity Credit (AOC) for higher education.

Imagine Carlos, who claimed the AOC for his daughter’s college tuition two years ago. The IRS later disallowed the credit because:

• The school wasn’t an eligible educational institution under IRS rules, or
• He didn’t have proper documentation of qualified tuition and expenses

The IRS notice told him that if he wants to claim the American Opportunity Credit again, he will need to file Form 8862.

Now, his daughter transfers to an accredited university that clearly qualifies. Carlos receives a Form 1098-T from the school, pays qualified tuition, and meets all the AOC rules. To claim the credit again this year:

• He completes the American Opportunity Credit section on his return.
• He attaches Form 8862, answering the AOC questions.

This gives another strong example of Form 8862 examples for tax credit claims: an education credit previously disallowed, now properly claimed with the help of Form 8862.

For IRS details on which credits are covered and how Form 8862 works, you can review the official instructions at IRS.gov.

When you do NOT need Form 8862

Not every denied credit triggers Form 8862. Some denials are just math issues or missing documents that don’t lead to this extra requirement.

For example:

• If the IRS adjusts your Earned Income Credit because you typed the wrong income amount, but they don’t say the credit is disallowed for due diligence or eligibility reasons, you generally do not need Form 8862 next year.
• If your return was rejected electronically because of a typo, but the IRS never officially disallowed the credit, Form 8862 usually is not involved.

The key is the IRS notice. If they say the credit is disallowed and that you must file Form 8862 to claim it in a future year, that’s when these examples of Form 8862 examples for tax credit claims apply to you.

For more on EIC and disallowance rules, the IRS has a detailed guide here: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc.

Example of Form 8862 after a two-year or ten-year EIC ban

Sometimes, the IRS goes further than a one-year disallowance. If they decide your earlier claim was reckless or fraudulent, they may impose a two-year or ten-year ban on the Earned Income Credit.

Let’s say the IRS determined that Sam recklessly disregarded the rules when claiming the EIC, and they issued a two-year EIC ban. After the ban period ends, Sam wants to claim EIC again.

In that situation, Sam must:

• Wait until the ban period is over.
• Once eligible again, file Form 8862 with the first return on which he claims the EIC after the ban.

This scenario is another example of Form 8862 examples for tax credit claims: the form acts like a gatekeeper after a serious past problem with the credit.

The IRS explains these bans and the related rules in Publication 596, which you can find here: https://www.irs.gov/publications/p596.

Example: Tax software flagging the need for Form 8862

Here’s a more modern, 2024-style example. Many people now file using tax software or online platforms.

Taylor files online and tries to claim the Earned Income Credit and Child Tax Credit. The software pulls in prior-year data and notices that the IRS disallowed Taylor’s EIC three years ago. The program pops up a message:

“Based on IRS records, you may need to file Form 8862 to claim the Earned Income Credit this year.”

Taylor answers a few guided questions and the software automatically generates Form 8862 and attaches it to the e-filed return.

This is a very current example of Form 8862 examples for tax credit claims: the software helps you avoid having your credit denied again simply because you forgot the form.

Example: Head of Household filing status and related credits

While Form 8862 is focused on specific credits, problems with Head of Household (HOH) filing status often come bundled with Child Tax Credit and EIC issues.

Take Denise, who claimed Head of Household, the Child Tax Credit, and the Earned Income Credit two years ago. The IRS audited her and decided she did not qualify for Head of Household because:

• The child didn’t live with her more than half the year, or
• She didn’t pay more than half the cost of keeping up a home

As a result, they disallowed her HOH status and the credits tied to that child. The IRS notice said she must file Form 8862 before claiming the Child Tax Credit and EIC again.

Fast-forward to the current year:

• The child now lives with Denise full-time.
• She clearly meets the HOH rules.
• She qualifies for both EIC and the Child Tax Credit.

She files as Head of Household and attaches Form 8862 to properly claim those credits again. This is another example of Form 8862 examples for tax credit claims where filing status and credits are tightly linked.

2024–2025 trends: Why Form 8862 matters more than ever

In recent years, the IRS has stepped up enforcement around refundable credits. These credits can mean thousands of dollars in refunds, so they attract extra scrutiny.

Some trends that make these examples of Form 8862 especially relevant for 2024–2025:

• More automated matching: The IRS increasingly uses data-matching tools to compare your return to third-party data (employers, schools, Social Security records). If something doesn’t line up, credits can be disallowed.
• Focus on due diligence: Paid preparers must follow strict due-diligence rules on EIC, CTC/ACTC, and AOC. If the IRS thinks a preparer or taxpayer ignored the rules, they may impose bans and require Form 8862.
• Changing family structures: Shared custody, blended families, and grandparents raising grandchildren are more common, which leads to more disputes over who can claim which child.

All of that means if you’ve had a credit denied once, being aware of these real examples of Form 8862 examples for tax credit claims can save you from losing out on money you’re legally entitled to in later years.

For general background on U.S. tax credits and filing rules, the Tax Policy Center at the Urban Institute and Brookings Institution offers plain-language explanations: https://www.taxpolicycenter.org.

How to use these examples when you prepare your own return

If you see yourself in any of these examples, here’s how to think about your next move:

• Ask: Was my credit officially disallowed by the IRS in a prior year? Look at your IRS notice. If it says the credit was disallowed and mentions Form 8862 for future years, that’s your sign.
• Check: Do I now meet all the rules for the credit? For example, does the child live with you enough months? Is your income in the allowed range? Are your school expenses truly qualified?
• If yes: Plan to file Form 8862 the next time you claim that credit.

The form itself is not long. The hard part is making sure your facts now match the IRS rules. The good news is that, as all these examples of Form 8862 examples for tax credit claims show, once your situation is legitimate, Form 8862 is simply the paperwork that lets the IRS say “okay, we’ll allow it again.”

If your situation is complicated or you’re unsure whether Form 8862 applies, consider talking to a qualified tax professional or using low-cost or free tax help programs listed on IRS.gov/volunteers.

FAQ: Form 8862 examples for tax credit claims

Q: Can you give a simple example of when Form 8862 is required?
Yes. Suppose you claimed the Earned Income Credit three years ago and the IRS later disallowed it because your child did not live with you long enough. This year, your child has lived with you all year and you meet the EIC rules. When you claim the EIC again, you must file Form 8862 with your return.

Q: Are there examples of when Form 8862 is NOT needed after a change?
Yes. If the IRS only corrected your credit because of a math error or a typo, and never issued a notice saying the credit was disallowed and Form 8862 would be required in future years, then you usually don’t need Form 8862.

Q: Does Form 8862 guarantee the IRS will allow my credit?
No. Form 8862 simply allows you to ask for the credit again after a prior disallowance. The IRS can still review your return and deny the credit if you don’t actually meet the rules.

Q: Do I need a new Form 8862 every year?
Typically, you file Form 8862 with the first return on which you claim the credit after a disallowance (or after a ban period ends). If the IRS accepts that return and doesn’t disallow the credit again, you usually don’t need to file Form 8862 in later years for the same credit, unless they disallow it again.

Q: Are there different examples of Form 8862 use for each credit?
Yes. For the Earned Income Credit, examples often involve residency or income issues. For the Child Tax Credit and Credit for Other Dependents, the problem is often who can claim the child. For the American Opportunity Credit, examples include using an ineligible school or not having proper tuition records. In every case, once the issue is fixed, Form 8862 is how you tell the IRS you’re ready to claim the credit again.

Q: Where can I see the official IRS rules for Form 8862?
You can read the most current instructions and download the form directly from the IRS here: https://www.irs.gov/forms-pubs/about-form-8862.