Rule Number: F1040-164-01

Rule Number: F1040-164-01

Rule Text: Form 8862 must be present in the return with Earned Income Credit Claimed Indicator checked. The e-File database indicates the taxpayer must file Form 8862 to claim Earned Income Credit after disallowance.

In order to correct the error, reference the DataValue (this indicates what person or number the rejection is related to). For more information, regarding how to view the details and data values related to rejections and refusals reference Viewing Reject and Refusals.

Cause:

• This occurs when the taxpayer has been disallowed EIC, CTC, ACTC, ODC, or AOTC at some point in their lifetime.
  • This could be at any point in their life if they were audited and then the credit was taken from them.
  • This does not mean they will not get the credits this year just that we must ask extra due diligence questions.

Resolution:

1.  Select Add Form.

2. Begin by typing Form 8862, into the search bar at the bottom of the All Forms and Schedules Menu.

3. Select Form 8862. Double-click to add the form.

2. Complete Part I - All Filers. Place an "X" in the boxes for the credits being claimed on this return. If you do not mark all applicable credit boxes, and submit with only one credit marked, you will receive another reject for the next credit.

3. Complete Part II - Earned Income Credit. 

• You will need to read the customer the question on Line 3. Answer the question accordingly (this would be yes if they were audited because they forgot a W-2 or some other type of income).

• If Line 3 is yes, skip Line 4. If Line 3 is no, read the customer the question on Line 4. Answer the question accordingly.

5. Taxpayers claiming EIC on a child: This should complete Form 8862 select Verify. Once the return is verified, resubmit the return.

Note: If the taxpayer is also claiming CTC, ACTC, or ODC you will need to complete Part III- Child Tax Credit/ Additional Child Tax Credit/ Credit for Other Dependents, by indicating the dependents citizenship status on Line 17.

Taxpayer's claiming EIC on themselves: Complete Section B- Filers Without a Qualifying Child or Children by entering the number of days the taxpayer and spouse (if applicable) lived in the US. If all year enter 365. Select Verify. Once the return is verified, resubmit the return.

This form must be completed accurately and completely in order for the return to be processed. If the taxpayer refuses to answer the questions the return cannot be filed.