Reduce your family’s taxes with IRS Form 1040 Schedule 8812

• Schedule 8812 calculates three family tax credits: the Child Tax Credit (up to $2,200 per qualifying child), the Additional Child Tax Credit (up to $1,700 refundable per child), and the Credit for Other Dependents ($500 per qualifying dependent)
• For tax year 2025, the child tax credit is up to $2,200 per qualifying child; up to $1,700 may be refundable as ACTC if you meet the earned income requirement. Phaseouts start at $200,000 single/HOH and $400,000 married filing jointly. 
• To claim the ACTC and potentially receive a cash tax refund, you must have earned income of at least $2,500.

What is Schedule 8812, and who needs it?

The IRS Form 1040 Schedule 8812, officially titled “Credits for Qualifying Children and Other Dependents,” is a supplemental tax form that helps families calculate valuable tax benefits. It determines how much you can claim in family-related tax credits and must be attached to Form 1040 (or its alternatives Form 1040-SR and Form 1040-NR) when filing your individual income tax return.

You need to file Schedule 8812 if you’re claiming any of the following:

• Child Tax Credit (CTC) for children under age 17
• Additional Child Tax Credit (ACTC) if your tax liability is less than your total CTC
• Credit for Other Dependents (ODC) for qualifying dependents who don’t meet the CTC requirement

The Internal Revenue Service requires Schedule 8812 for calculating these credits because the calculation involves multiple factors, including your adjusted gross income, earned income, tax liability, and the number of qualifying children or other dependents you’re claiming.

What are the 2025 Child Tax Credit updates?

The 2025 tax year introduced several significant updates to the Child Tax Credit through the One Big Beautiful Bill Act (OBBBA, Public Law 119-21), signed into law on July 4, 2025. Key changes effective for the 2025 tax year include:

• The maximum Child Tax Credit increased to $2,200 per qualifying child for tax year 2025, with up to $1,700 per child being refundable as the additional child tax credit (ACTC) if you meet the earned income rules. 
• The child tax credit decreases for taxpayers with a modified adjusted gross income over $200,000 ($400,000 for married couples filing jointly). The credit is reduced by $50 for every $1,000 over these income limits.
• For 2025 and beyond, taxpayers claiming the CTC or ACTC must have a valid Social Security number issued before the due date of their tax return.

The earned income requirement for the ACTC stays at $2,500 for 2025. Taxpayers must have earned income above this threshold to qualify for the refundable portion of the credit. The refund calculation remains at 15 percent of earned income above $2,500, up to the maximum of $1,700 per qualifying child.

Who qualifies for the additional child tax credit?

To successfully claim the additional child tax credit and reduce your tax liability or receive a tax refund, your family must meet two main sets of requirements for the 2025 tax year: those related to the qualifying child and those related to your financial situation.

Qualifying child requirements

To claim a child on Schedule 8812, they must meet these criteria:

1. Age: The child must be 16 or younger (under 17) as of December 31, 2025.
2. Relationship: The child must be your son, daughter, stepchild, foster child, sibling, stepsibling, or a descendant of these (adopted children count as your own).
3. Residency: The child must have lived with you in the U.S. for more than half the year.
4. Support: The child cannot have provided over half of their own support during the year.
5. ID requirement: The child must have a valid Social Security Number (SSN) issued by the tax return due date. Without this, they only qualify for the ODC.

Taxpayer and income requirements

The taxpayer filing Form 1040 must also meet certain financial and filing requirements to receive the refundable tax credit.

1. Earned income: You must have earned income greater than $2,500 for the tax year. The ACTC is calculated based on 15% of your earned income above this $2,500 floor, up to the maximum refundable amount of $1,700 per qualifying child.
2. Income thresholds: Your Modified Adjusted Gross Income (AGI) must be within the limits. The full child tax credit begins to phase out if AGI exceeds $400,000 if you are married filing jointly, or $200,000 for all other filing statuses.
3. Filing Requirement: You must complete and attach Schedule 8812 to your Form 1040 (or Form 1040-SR or Form 1040-NR). This form walks you through the precise calculation of the ACTC.

Why you may not qualify?

Failing to meet the strict requirements can prevent you from receiving the full child tax credit. The most common reasons for not qualifying include:

• No SSN: If your qualifying child does not have an SSN that is valid for work and issued by the filing due date, you cannot claim the child tax credit or the ACTC for them. You may still be able to claim the $500 ODC if the child has an ITIN.
• Insufficient earned income: If your earned income is below $2,500, you can’t claim the additional child amount as a refundable credit (though you may still get some non-refundable credit if you have tax liability).
• Residency test failure: If the child did not live with you for more than half the year, they are not a qualifying child for the credit. 

What are common scenarios affecting the Child Tax Credit?

Claiming the Child Tax Credit can vary depending on your family’s unique circumstances. Understanding how these scenarios impact your eligibility is key to accurately completing Schedule 8812.

1. Multiple children. The full CTC limit applies per child. Families calculate the Child Tax Credit by multiplying $2,200 by each qualifying child (under 17 with a valid SSN).
2. Shared custody. When parents are divorced, separated, or living apart, only one parent can claim the child tax credit for the same child in the same tax year. Typically, the custodial parent claims the child unless a noncustodial parent has a valid release under IRS rules. 
3. Adoption or foster care. Foster children can qualify for the child tax credit if they meet all the same requirements as biological children. The child must have lived with you for more than half the tax year.
4. Resident alien or bona fide residents of Puerto Rico. U.S. resident alien taxpayers and certain bona fide residents of Puerto Rico can qualify, but special ACTC procedures may apply; see the instructions carefully. 
5. Unemployment income. Unemployment benefits do not qualify as earned income for the ACTC purposes. Therefore, they cannot be used to satisfy the earned income requirement, which applies exclusively to wages and self-employment income.

Schedule 8812 vs. 1040: What is the difference?

Understanding the distinction between Form 1040 and its Schedule 8812 is essential for maximizing your tax benefits. 

Form 1040: This is where you report the CTC and the ODC. These are generally nonrefundable, meaning they can reduce your tax owed to zero.

Schedule 8812 is used to:

1. Calculate the amounts for the CTC and ODC.
2. Determine your ACTC. The ACTC is refundable, meaning it can generate a refund even if you don’t owe any taxes.

For 2025 drafts, the CTC/ODC goes to Form 1040, line 19, and the ACTC goes to Form 1040, line 28.

How do I complete Schedule 8812?

Completing Schedule 8812 requires careful attention to detail and accurate information from your Form 1040. Before beginning, ensure you have completed lines 1 through 15 on your Form 1040 and gathered all necessary documentation for your qualifying children and other dependents. Also, check the official IRS Form 1040 Schedule 8812 instructions before completing and submitting it.

1. List dependents on Form 1040. Identify credits for qualifying children (CTC box) or other dependents (ODC box). The same person can’t be both.

2. Complete Part I. Calculate the total nonrefundable tax credit you’re eligible for. You enter the number of qualifying children (under 17) and other dependents (who qualify for the $500 ODC). This section determines the nonrefundable portion of the Child Tax Credit you can use to reduce your tax liability on your Form 1040.

Completing Schedule 8812 Part I in pdfFiller.

3. Compute ACTC in Part II-A. This is the critical section for figuring out the ACTC.

• Report your earned income in Line 18a.
• Multiply your earned income over $2,500 by 15% in Line 19 to calculate a portion of your potential refund.

4. Complete Part II-B (if you have 3 or more qualifying children). Calculations in lines 21-26 determine whether the alternative method produces a higher ACTC than the earned income method. Use the information from Schedules 1, 2, and 3 of your Form 1040. 

Schedule 8812 Part II, ready to be filled out within pdfFiller.

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Final thoughts

The Child Tax Credit, particularly the Additional Child Tax Credit, offers valuable tax relief for working families. Understanding the Schedule 8812 instructions and ensuring proper coordination with Form 1040 can help maximize these benefits.

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Glossary

• Additional Child Tax Credit (ACTC): This is the refundable portion of the Child Tax Credit, allowing taxpayers to receive a tax refund of up to $1,700 per qualifying child, even if their income tax liability is zero. 
• Earned income requirement: The minimum amount of income you must earn from working to qualify for the refundable portion of the CTC. It includes wages and net earnings from self-employment, but excludes income like pensions or interest.
• Qualifying child: A child who meets the age, relationship, residency, support, and Social Security Number tests to allow a taxpayer to claim the CTC. 
• Adjusted Gross Income (AGI): Your gross income minus certain specific reductions, or “adjustments.” It’s critical for the IRS to determine eligibility for many tax benefits, including the phase-out of the CTC.
• Refundable Tax Credit: A tax credit that can reduce your tax bill below zero, resulting in a tax refund check for the difference.