2006 Instructions for Form 8812, Additional Child Tax Credit

Instructions

Purpose of Form

Use Form 8812 to figure your additional child tax credit. The additional child tax credit may give you a refund even if you do not owe any tax.

Who Should Use Form 8812

First, complete the Child Tax Credit Worksheet that applies to you. See the instructions for Form 1040, line 53, Form 1040A, line 33, or Form 1040NR, line 48. If you meet the condition given in the TIP at the end of your Child Tax Credit Worksheet, use Form 8812 to see if you can take the additional child tax credit.

Effect of Credit on Welfare Benefits

Any refund you receive as a result of taking the additional child tax credit will not be used to determine if you are eligible for the following programs, or how much you can receive from them. But if the refund you receive because of the additional child tax credit is not spent within a certain period of time, it may count as an asset (or resource) and affect your eligibility.

  • Temporary Assistance for Needy Families (TANF).

  • Medicaid and supplemental security income (SSI).

  • Food stamps and low-income housing.
  • Nontaxable Combat Pay

    Enter on line 4b the total amount of nontaxable combat pay that you, and your spouse if filing jointly, received in 2006. This amount should be shown in Form W-2, box 12, with code Q.

    Railroad Employees

    If you worked for a railroad, include the following taxes in the total on Form 8812, line 7.

  • Tier 1 tax withheld from your pay. This tax should be shown in box 14 of your Form(s) W-2 and identified as "Tier 1 tax."

  • If you were an employee representative, 50% of the total tier 1 tax and tier 1 Medicare tax you paid for 2006.
  • 1040A Filers

    If you, or your spouse if filing jointly, had more than one employer for 2006 and total wages of over $94,200, figure any excess social security and tier 1 railroad retirement (RRTA) taxes withheld. See Pub. 505. Include any excess on Form 8812, line 10.

    Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax.

    You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by Internal Revenue Code section 6103.

    The average time and expenses required to complete and file this form will vary depending on individual circumstances. For the estimated averages, see the instructions for your income tax return.

    If you have suggestions for making this form simpler, we would be happy to hear from you. See the instructions for your income tax return.

    Earned Income Chart—Line 4a

    ----------------------------------------------------------------------
    IF you...    AND you...           THEN enter on line 4a...
    ----------------------------------------------------------------------
    have net     use either optional  the amount figured using Pub. 972.
    earnings     method to figure
    from self-   those net earnings
    employment 
    ----------------------------------------------------------------------
                 completed Worksheet  your earned income from Worksheet B,
                 B on page 51 of      line 4b, plus all of your nontaxable
                 your Form 1040       combat pay if you did not elect to
                 instructions         include it in earned income for the
                                      EIC. If you were a member of the
                                      clergy, subtract (a) the rental
    are taking                        value of a home or the nontaxable
    the EIC on                        portion of an allowance for a home
    Form 1040,                        furnished to you (including payments
    line 66a,                         for utilities), and (b) the value of
    or                                meals and lodging provided to you,
    Form 1040A,                       your spouse, and your dependents for
    line 40a                          your employer's convenience.
                 ---------------------------------------------------------
                 did not complete     your earned income from Step 5 on
                 Worksheet B or       page 48 of your 1040 instructions or
                 filed Form 1040A     page 42 of your 1040A instructions,
                                      plus all of your nontaxable combat
                                      pay if you did not elect to include
                                      it in earned income for the EIC.
    ----------------------------------------------------------------------
                 were self-employed,  the amount figured using Pub. 972.
                 or you are filing
                 Schedule SE
                 because you were a
                 member of the
                 clergy or you had
                 church employee
                 income, or you are
                 filing Schedule C
                 or C-EZ as a
                 statutory employee
                 ---------------------------------------------------------
                 are not              your earned income figured as
                 self-employed or     follows:
                 filing Schedule
                 SE, C, or C-EZ for   Line 7 of Form 1040 or
                 the above reasons    Form 1040A, or line 8 of
                                      Form 1040NR                     ____
                                      Subtract, if included on
                                      line 7 (line 8 for
                                      Form 1040NR), any:
                                      • Taxable scholarship or    }
                                        fellowship grant not      }
                                        reported on a Form W-2.   }
                                                                  }
                                      • Amount received for work  }
                                        performed while an        }
                                        inmate in a penal         }
                                        institution (put "PRI"    }
                                        and the amount            }
                                        subtracted in the space   }
    are not                             next to line 7 of         }
    taking the                          Form 1040 or              }
    EIC                                 1040A (line 8 for         }
                                        Form 1040NR)).            }
                                                                  }
                                      • Amount received as a      }
                                        pension or annuity from   }
                                        a nonqualified deferred   }
                                        compensation plan or a    }
                                        nongovernmental section   } - ____
                                        457 plan (put "DFC" and   }
                                        the amount subtracted in  }
                                        the space next to line 7  }
                                        of Form 1040 or           }
                                        Form 1040A (line 8 for    }
                                        Form 1040NR)). This       }
                                        amount may be shown in    }
                                        box 11 of your            }
                                        Form W-2. If you          }
                                        received such an amount   }
                                        but box 11 is blank,      }
                                        contact your employer     }
                                        for the amount received   }
                                        as a pension or           }
                                        annuity.                  }
                                                                  }
                                      • Amount from Form 2555,    }
                                        line 43, or               }
                                        Form 2555-EZ, line 18.    }
                                      Add all your nontaxable
                                      combat pay from
                                      Form(s) W-2, box 12, with
                                      code Q                        + ____
                                                      Earned income = ____
    ----------------------------------------------------------------------