What is the purpose of Form 8862?

The purpose of Form 8862 is to claim the Earned Income Tax Credit (EITC) after it has been disallowed in prior tax years. When a taxpayer's eligibility for the EITC is denied, they must file Form 8862 if they want to claim the credit in a subsequent year. This form helps the taxpayer demonstrate their eligibility for the credit after it has been disallowed, and it requires the taxpayer to provide information that indicates they meet the necessary qualifications for the EITC.

In the context of the other options, applying for educational tax credits involves different forms such as the American Opportunity Credit or Lifetime Learning Credit, which would be incorrect as these do not pertain to the EITC. Reporting foreign income typically involves Form 2555 or Form 1116, depending on the specifics of the income, and does not relate to the EITC. Capital gains tax is calculated using Schedule D or Form 8949, which are specifically designed for reporting capital gains and losses, not for claiming credits. Thus, Form 8862's specific function is solely tied to the EITC, making it the correct choice.