CP02: You may not qualify for all the Earned Income Tax Credit you claimed

Why you might get this

• You claimed the Earned Income Tax Credit (EITC) on your tax return.
• The IRS believes you may not be entitled to some or all of that credit.
• The children or income you listed may not meet the rules for claiming the credit.

The deadline

This notice asks you to review your credit and decide if you need to fix your return. There isn't a hard deadline printed as a countdown, but you should act promptly by the date shown on your notice to avoid an audit, a penalty, or a ban on claiming the credit later.

This notice doesn't carry a fixed response deadline, but it still deserves attention — see what to do below.

What to do

1. Review the rules for claiming the Earned Income Tax Credit.
2. Use the IRS online EITC Assistant tool to check if you and your children qualify.
3. If you claimed the credit correctly, you don't need to do anything.
4. If you claimed the credit in error or claimed too much, file Form 1040-X (Amended U.S. Individual Income Tax Return) to correct it.
5. Get free help from VITA or TCE programs, or hire a paid preparer, if you can't do it yourself.

What happens if you ignore it

If you didn't qualify and don't amend your return, the IRS may audit your claim and deny all or part of the credit. They may also charge a penalty or ban you from claiming the credit for 2 or 10 years.

You can authorize someone to represent you before the IRS. You may qualify for free help from the Taxpayer Advocate Service or a Low Income Taxpayer Clinic. If the IRS denied your credit before but you now qualify, you may need to file Form 8862 with your next return.

What a CP02 notice means

If you got a CP02 notice, the IRS is telling you that you may not be entitled to some or all of the Earned Income Tax Credit (EITC) — a tax break for people who work and earn lower incomes — that you claimed on your return.

The good news: this notice asks you to double-check your own work. Start by reviewing the EITC rules and using the free online EITC Assistant tool. It walks you through whether you and any children you listed actually qualify.

If you claimed the credit correctly, you don't have to do anything. If you claimed it by mistake or claimed too much, you'll want to file Form 1040-X to correct your return. You can get free filing help through the IRS VITA or TCE programs, or hire a paid preparer.

Acting on this notice matters. If you ignore it and didn't qualify, the IRS can audit your claim, deny the credit, charge a penalty, or even ban you from claiming the EITC for years.

Solace can keep an eye on your IRS account and let you know if anything changes, so you're never caught off guard.