2022 Instructions for Schedule 8812

Schedule 8812

Are you ready to tackle your tax returns for 2022? One crucial form that many taxpayers will need to complete is Schedule 8812. This form helps determine if you qualify for the Additional Child Tax Credit, a valuable benefit that can reduce the amount of taxes owed and put more money back in your pocket. However, navigating the 2022 Instructions for Schedule 8812 can be daunting.

Form 8812 is necessary in order to be able to claim the child Tax Credit and also the additional Child Tax credit, despite not owing any federal income taxes. It has been instructed by the IRS for the year 2022 to prepare schedule 8812, in order to claim the amount of the total credit amount for all the qualifying children is more than the amount of the tax owed by you for the year. This is as opposed to the year 2021 when one only required this particular schedule to claim the dependent credits This was also to be able to determine if the individual had any paybacks for any excess advanced child tax credits received by you in the year 2021. Now, how does one prepare and file this form? Let us take a look:

child tax credit

The Changes Done to the Additional Child Tax Credit

Previously, before the year 2018, the Federal tax law allowed the individual to claim the Child Tax credit for up to $1000 for every qualifying child that has been claimed as a dependent on your tax return. At the start of the year 2018, the Child Tax Credit doubled up to $2000 for every qualifying child. Through the Additional Child Tax Credit one could also claim for amounts up to $1500 for the year 2022.

The Qualifying Children: The Requirements

There are a few requirements that you must meet in order to be able to claim the Additional Child Tax Credit on Form 8821 and the ease greatly depends upon the qualifying child requirements of the original Child Tax Credit. The qualifying child can be:

  • Daughter
  • Son
  • Stepchild
  • Blood/step sibling
  • A foster child or a descendant of any of the above.

It is also required that the child is not 17 years of age before the end of the tax year in order to offer more than half of their financial support. Also, every child you have claimed the credit for should have lived with you for more than half the tax year. Nevertheless, even if the child meets all the requirements one cannot claim the credit until you claim them as dependent on the tax returns. This is the main eligibility to claim if the child is insufficient.

Read More-: What is Child Tax Credit and How to Claim it in 2022

The Exceptions: For the Qualifying Child Requirements

There are a few exceptions that have been specified by the IRS to the requirements that the child has lived with you for more than half of the tax year. This involves any child that has been born but has passed away within the same tax year. This is applicable for as long as it was your home where the child has lived. 

Likewise, the IRS also treats the child living with you as and when they are living with you even if they are away at school or in some juvenile detention facility. This also applies when you are away on a business, for some medical treatment, or on active military duty. The claim can also be made by a non-custodial parent in case the parent agrees not to claim the credit or claim the child as a dependent.

The Limitations of the Income

There are times and chances when you have met all the requirements but still, the amount of tax owed by you at the end of the year is zero or an amount less than the desired credit. In such a situation, one can claim the full Child Tax Credit of about $2000. Likewise, you are also eligible for the reduced Additional Child Tax Credit when you complete Schedule 8812 with the tax return. 

Mostly, for taxpayers, the credit can be reduced if the adjusted gross income is higher than the threshold that applies to your filing status. For instance, if the filing is done as a single, head of the household, married filing separately or as a qualifying widower who is a taxpayer for the year 2022 tax year and owes more than $200000 as the adjusted gross income. This amounts to $400000 in the case of joint filers, also the credit reduces as the amount for the exceeding limit increases.

The Earned Income By the Individual

Once the individual is set to prepare Schedule 8812 and calculates the Child Tax Credit that you are eligible for, then you must calculate the gross income amount earned by you. This is the amount that has to be entered in line 6a. The earned income by you includes the income received by you from work, or by some business indulgence. This, however, does not include the major part of your taxable income that is earned by an individual from investments. This includes the interest from the savings account or the profits that are earned from the stocks trading for the year. Also, unemployment benefits are not categorized as earned income Tax either.

How to File: the Schedule 8812

It is advised to follow the instructions in order to be able to file Schedule 8812 and enter the results on your form 1040. Also, the individuals will need to include the schedule with their tax returns.

For the year 2022:

The following are the parts included in the form in order to calculate the Additional Child Tax credit:

Part 1: This is the portion of the form where the information from form 1040 is included in order to calculate the credit amount.

Part II-A: You need to complete this portion to claim the Additional Child Tax Credit.

Part II-B: This needs to be completed in case the individual has three or more qualifying children or is a bona fide resident of Puerto Rico.

Part II-C: At this portion, it is required to total up the additional Child Tax Credit and utilize this amount in order to claim the credit on your Tax form 1040

The Improper Claims

In case you claim the Child Tax Credit or the Credit for other Dependants, or the Additional Child Tax Credit in error, then there is a chance that you can be barred from claiming any of the credit for two years. It has to be established that the error made by you was reckless or intentional disregard of the CTC, ODC or ACTC rules. In case the IRS claims that the error has been done by fraud, then the individual will not be able to claim any of the credits for at least 10 years. There are also chances that you might have to pay penalties for such errors.

The Child Tax Credit: The Changes

Since the start of 2018, the Child Tax Credit has doubled to $2000 per qualifying child. This is from $1000 per child earlier on. Also, with the help of the Additional Child Tax Credit, one can claim up to $1400. 

In the year 2022, the advanced child tax credit payments will not be provided by the federal government. Likewise, the stimulus payments have been designed to assist families to offset a significant increase in unemployment and cost hardships due to the Covid-19 pandemic. However, the advanced child tax credit payments are not available in 2022, but you can be eligible for a one-time tax refund. Once the form has been completed, the amount of the Child tax credit can be calculated and you need not have to file it separately for this tax credit.

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The enhanced ‘child credit’ was provided by the federal government to families, and was distributed monthly to assist those with the imbalance in the economy that had occurred as a result. This was offered to the primary caregivers to those who had children under 18 to take care of. So, be sure to go through the various aspects of Schedule 8812 in order to understand if you are eligible for the same.

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Frequently Asked Questions(FAQs)

How to File the Schedule 8812?

This is an easy task to accomplish, as one does not require to complete a separate application to receive the credit. One can easily download the IRS form from the official website of the IRS and simply follow the instructions as required. You need to complete the form along with your regular taxes. Also, the individual will need to complete the instructions to file the schedule form 8812 and write the results on Tax Form 1040. Finally one has to complete the schedule with your tax return.

When is the best Time to File Schedule 8812?

It is recommended to complete the filing of IRS schedule 8812 when you complete the IRS tax forms each year. You need to claim your child’s tax credit along with other credits for 2022 by April 18th, 2023. However, an extension is granted to those who miss out on the due date. 
Also, you need to bear in mind that if the total credit amount is greater than the taxes owed may receive a child tax credit for 2022. Nevertheless, one will not receive a full refund if one owes more taxes than that of your Child tax credit. You will receive the refund amount via a Direct Deposit or a cheque. 
As a final note, it is advised to file your taxes on time and avoid any delays. Also, family caregivers can file state and federal tax returns with the help of any of the recommended tax software out there. This will ensure that your tax returns will be submitted once the IRS starts accepting returns

What are the current Changes in the Child Tax Credit?

There have been a few changes and enhancements with regards to the Child tax credit:
🔹 The enhanced credit that was allowed for the qualifying children has expired for the children under the age of 6 years and 18 years of age. As for the year 2022, the initial amount is $2000 of CTC for every qualifying child. This credit amount starts to phase-out in case the modified adjusted gross income is more than $200000 or $400000 in the case of a joint return. As it was in the year 2020, the amount of the CTC that can be claimed as a refundable credit is limited, except that the maximum ACTC amount for every qualifying child has increased to $1500. 
🔹 Also the other important change is that the increased age for the qualifying child has expired. Now, the child must be 17 years of age at the end of the year 2022, to be considered as a qualifying child.

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