Step 1: Access Form 8867 in TaxWise
Open the taxpayer’s return in TaxWise.
Click Add Form and search for Form 8867 (Paid Preparer’s Due Diligence Checklist).
If claiming the Child Tax Credit (CTC) or Additional Child Tax Credit (ACTC), Form 8812 should automatically be included in the return.
Step 2: Complete Form 8867 – Due Diligence Checklist
You must answer all four due diligence questions correctly:
Eligibility Verification
Did you interview the taxpayer and confirm they qualify for the Child Tax Credit (CTC) or Additional Child Tax Credit (ACTC)?
Documentation Review
Did you review proof of residency, relationship, and taxpayer eligibility (e.g., birth certificates, school records, or IRS notices)?
Knowledge Standard
Did you ask relevant questions and document the taxpayer's responses?
Recordkeeping Requirements
Did you keep copies of all documentation supporting eligibility and due diligence compliance?
✅ Answer each question honestly based on the information gathered from the taxpayer.
Step 3: Complete Form 8812 (Additional Child Tax Credit)
Verify the number of qualifying children and their ages.
Confirm the taxpayer’s income is within the phase-out limits.
TaxWise will automatically calculate the Child Tax Credit (CTC) and determine if any portion is refundable as the Additional Child Tax Credit (ACTC).
Ensure all required fields are completed for accurate filing.
Step 4: Review and Submit the Return
Double-check Form 8867 and Form 8812 for accuracy.
Ensure all required documentation is attached and properly recorded.
Proceed with e-filing the return.
Important Notes:
Failing to complete Form 8867 properly can result in penalties for the preparer.
Always follow IRS due diligence guidelines when claiming CTC/ACTC to avoid compliance issues.