Please note that these scenes are not in the CBS airings.
Patchy (Parodying the role of S.D. Kluger from Santa Claus is Comin' to Town) drives a mail truck through a snowy mountain range. He stops to wish the viewers a Merry Christmas and tells them he wanted to make sure Santa Claus got his letter. He then lies saying he gave the mailman the day off, but it is revealed that he stole the truck and the mailman is tied up in the back.
Potty doubts they'll make it to the North Pole, and he and Patchy argue about which Christmas carol the directions to the North Pole are in. The truck is driven madly until Potty notices there is literally a fork in the road, which gets stuck in one of the tires and causes the truck to spin madly. Patchy then suggests that they see what SpongeBob is doing for the holidays.
Patchy drives the truck off a cliff and the mailman escapes. He and Potty get lost in the woods (since the fork got stuck in one of the truck's tires and caused it to go flat, preventing them from being able to drive it any further) and are trying to warm up by a fire. Out of a sense of hunger, Patchy hallucinates and imagines Potty as a platter of buffalo wings and nearly eats him, only to snap out of it. Potty then also hallucinates and imagines Patchy's head as a suet cake topped with birdseed and pecks on him.
At the end of the episode, Patchy and Potty make it to the North Pole, believing they finally made it to Santa's workshop. Patchy apparently meets Santa in a cave and tells him his Christmas wish is to meet SpongeBob. However, it turns out he was, once again, hallucinating and really encountered a hungry polar bear, which started chasing him. The real Santa nearby puts Patchy on the naughty list for stealing a mail truck, then he and Potty have a good laugh and wish the viewers a merry Christmas.
Set to December 23, SpongeBob is really excited that Christmas is almost here. SpongeBob sees his friends are preparing for Christmas as well. Squidward is stringing lights so Santa knows to "go away", and he hates Santa and he is always naughty to him. Patrick has set a trap for Santa to make him stop the clocks so they will have Christmas all year long (but he gets trapped in his own trap). Sandy is conducting a Christmas scientific experiment. Mr. Krabs is ready for the season of "getting". Meanwhile, Plankton isn't happy as he gets nothing but coal in his stocking every year, so he comes up with a new plan to ruin the holidays which involves the element he recently discovered, Jerktonium (Jt) that he pastes on the periodic table. He then sprinkles it in fruitcake which will cause anyone who eats it to become a jerk. With everyone except him acting like a jerk, Santa will have no other choice but to put him on his nice list and give what he always wanted to get for Christmas- the formula for the Krabby Patty. He feeds some to SpongeBob, but it has no effect, so he throws the keys at SpongeBob, kicks the cake dispenser and heads back into the Chum Bucket, thinking his plan has failed yet again.
While SpongeBob is busy feeding fruitcake to everyone, including Christmas carolers, children, the parade band, anchovies, Santa and the driver of the parade truck, Plankton realizes that SpongeBob is immune to Jerktonium, for the fact that he is extremely pure-of-heart and his love of the Christmas holidays are counteracting the effects of the Jerktonium. Although Plankton has "Plan A" failed, thanks to SpongeBob's goodness, he unleashes "Plan B", inventing an evil wind-up robot clone of SpongeBob, named ToyBob, to ruin Bikini Bottom. The robot throws a boat into a building and burns down the Krusty Krab sign, trapping Mr. Krabs inside.
Later that day, as he returns from feeding fruitcake to everyone in Bikini Bottom, SpongeBob crosses paths with the carolers, who bad-mouth him. As SpongeBob passes the Krusty Krab where Mr. Krabs is (cheaply) fixing the sign, Mr. Krabs says that the repairs are going off his salary, thinking SpongeBob had destroyed the sign. Then he sees with Patrick, who also became a jerk, setting another trap for Santa and tells SpongeBob to leave. The next morning, Christmas Eve, SpongeBob finally notices that everyone is being mean. Afraid that Santa might fly by Bikini Bottom, he asks Squidward for help, who tricks SpongeBob into thinking he's not home and suggests that SpongeBob should go bug Sandy instead. Right after SpongeBob leaves, ToyBob knocks (or more specifically, bumps) Squidward's door, and when Squidward (still angrily) refuses to let him in, he grabs the door and smashes it on Squidward's head after he angrily demands for the door back.
Meanwhile, SpongeBob goes to Sandy's treedome to explain, but she is also a jerk. SpongeBob accidentally drops some fruitcake into Sandy's Christmas Magic Analyzer, which shows that it is contaminated with jerktonium. The way to cure it is with a song (Don't Be a Jerk (It's Christmas). Sandy asks where he got it from and he answers Plankton. Sandy asks again in disbelief that he would take the cake from the known to be evil plankton and just hand it out to people without suspicion, to which SpongeBob stupidly says yes. He then sings it to all the Bikini Bottomites, thus turning them all good and respectful again as they joined in.
Unfortunately, after that, it was too late. Santa then comes, and tells SpongeBob that he, afraidly, is the bearer of bad tidings, and that SpongeBob and everyone else, except for Plankton, is on his naughty list, this year, but also deserve coal for being a bunch of jerks, (with no "But-"s about it, which shocked SpongeBob, his friends (except Squidward) and everyone else, in confusion,) and that he is just as surprised as SpongeBob, and then tells his friends and the others that when compared to Plankton, he's been a saint, and he didn't believe that Mr. Krabs, Squidward, Patrick, and Sandy are good, too. He then gives Plankton the Krabby Patty formula as his present (which means that he has HIS ways), which was taken from Mr. Krabs secretly by the elves who then attempt to take Mr. Krabs' money in the wallet as well (which is why they think he is on the naughty list), but Pearl made him blow their cover. When SpongeBob is carried to Santa by Patrick who (believes that is was SpongeBob's fault for all this naughtiness Spongebob had caused and) slaps him to get him to talk clearly, he tries to explain that he had got it all wrong, but, instead, Santa tells SpongeBob that, on the contrary, he (actually) found out that SpongeBob is the worst of all (and also possibly the only one on Santa's naughty list all along), because he believes that SpongeBob caused havoc in Bikini Bottom. Immediately, ToyBob arrives and morphs into his mega mode and threatens to destroy not only more of Christmas, but also Santa.
SpongeBob tries to protect Santa but is easily defeated when the robot throws him far away. Santa tries to hide in the Krusty Krab, but ToyBob captures him. SpongeBob saves Santa by using the fruitcake-dispenser Plankton loaned him to shoot fruitcake at it, causing it to malfunction and break down back into pieces. Santa thanks SpongeBob for saving him and tells him that he has been indeed a very good led, unlike the "owner of ToyBob". One of the elves gives Santa ToyBob's key (which is read "If found, please return to the Chum Bucket"), which reveals that it was Plankton and his Jerktonium that caused the people being jerks (as he made the mistake of writing on the key), and the destruction that ToyBob caused (which made Santa very angry to Plankton). Mr. Krabs takes back the formula and Santa has the elves dumping coal on Plankton. Santa then leaves everyone to celebrate the rest of the holidays (except Squidward). SpongeBob, who is now surprised, asks his friends, and the others, that anyone has seen Patrick. The episode ends with Patrick on the back of the sleigh and netting him, throwing him and the reindeer off course.
"It's a SpongeBob Christmas!" was the first full-length episode in the series that was produced in stop motion animation. Mark Caballero, Seamus Walsh, and Christopher Finnegan of Screen Novelties animated it, and Caballero and Walsh also served as its directors. 
 Production on the episode began in October 2011 at Los Angeles, California.  According to Chris Finnegan, it took about five months to shoot, with a couple of months on either end for research, development, and post.  Six sets were constructed on which sixty pounds of baking soda were used as snow, 42 pounds of glitter for the background, 22 pounds of wood chips were used to create Sandy's treedome floor and 20 boxes of cereal covered the coral rocks.  Caballero and Walsh had conflicts on making sure the stop motion version of Bikini Bottom will resemble the 2D world of the series. There was also the issue of making SpongeBob resemble his 2D self.
Series' creator Stephen Hillenburg and executive producer Paul Tibbitt provided hands-on feedback on the production on a weekly basis. "They'd check out the weeklies and go back and forth with us on the various gags [...] It was really a pleasurable experience when they came to visit, because we come from the same planet. It all felt very easy and natural," Walsh said. 
The episode used stop motion animation which was implemented by "Screen Novelties."
‣ ? [Patchy driving a mail truck] ‣ ? [fork in the road] ◦SpongeBob SquarePants Theme Song - Stephen Hillenburg, Derek Drymon, Eban Schletter [intro] ◦Santa Has His Eye on Me - Luke Brookshier, Eban Schletter [title card; SpongeBob sings this] ‣Some Things To Know About Monsters - Eban Schletter ["I'm way ahead of you, Karen."] ‣ ? [shot of fruitcake] ‣ ? [Plankton explains his plan] ‣ ? [Plankton adds jerktonium to the fruitcake] • ? - Barry Anthony [SpongeBob eating Plankton's fruitcake] ‣ ? [SpongeBob gives fruitcake to carolers] • ? - Jeremy Wakefield ["It's great to see people so passionate about the holidays."] ‣ ? ["The jerktonium seems to work on these jerks."] ‣ ? [parade] ◦Hot Fruitcake - Marc Ceccarelli, Eban Schletter [SpongeBob giving everyone fruitcake] ‣ ? [people fighting] ‣ ? [Santa parade float] •Jingle Bells - Sage Guyton, Jeremy Wakefield ["I want a trampoline!"] ‣ ? ["Success!"] ‣Lonely Stranger - Laurie Johnson [Karen explaining how Plankton's plan is flawed] ‣ ? [ToyBob revealed] •Vibe Sting - Nicolas Carr ["Huh?"] •Steel Sting - Jeremy Wakefield [Plankton turns ToyBob's wind-up key] ‣Attack of the Giant Robots - Cris Velasco ["I am ready... to destroy Christmas!"] ‣ ? [Patchy's mail truck crashes] • ? - Sage Guyton, Jeremy Wakefield ["Merry Christmas, fellas!"] • ? - Jeremy Wakefield [Patrick gets mauled] ‣ ? ["Ah, Christmas Eve."] •Deck the Halls - Sage Guyton, Jeremy Wakefield [Frankie, Johnny greet each other] ‣ ? [Frankie throws snowball at Johnny] • ? - Jeremy Wakefield ["I'm gonna need some help."] ‣ ? [SpongeBob knocks on Squidward's door] • ? - Nicolas Carr ["Good idea, Squidward!"] ‣Monster Bug A - Gregor F. Narholz [ToyBob comes by] • ? - Jeremy Wakefield [ToyBob smashes Squidward's door over his head] ‣ ? [SpongeBob goes to Sandy's treedome] ‣ ? [Sandy complains that she's out of fruitcake] • ? - Jeremy Wakefield [SpongeBob slips on an acorn] • ? - Nicolas Carr ["Well, I'll be hornswoggled."] ‣Unsettled Menace - Phillip Green ["This is terrible!"] ‣ ? [Sandy calls SpongeBob an idiot] ‣Danger Sign - Harry Bluestone, Emil Cadkin ["I've eaten tons of that fruitcake!"] ‣Alien Spacecraft A - Gregor F. Narholz [x-ray of SpongeBob] ‣Adventure Fanfare 1 - Harry Bluestone, Emil Cadkin [Sandy calculates an antidote] ◦Don't Be a Jerk (It's Christmas) - Tom Kenny, Andy Paley [SpongeBob sings this] •Jingle Bells - Sage Guyton, Jeremy Wakefield [Santa arrives with bad news] ‣Straight from Hell - Gregor F. Narholz [ToyBob wreaking havoc] ‣Mr. Swashbuckle - James McConnel [SpongeBob shoots fruitcake at ToyBob] • ? - Sage Guyton, Jeremy Wakefield [coal dumped on Plankton] ◦Santa Has His Eye on Me - Luke Brookshier, Eban Schletter [Santa leaves] ‣ ? [Potty pecking Patchy's head] ‣ ? [Patchy finds Santa's workshop]
The full episode aired on Nickelodeon UK and Ireland on December 2, 2012.
This episode aired for the first time in Israel at September 9, 2012. This is the first time that SpongeBob first aired on Israel before US.
This episode premiered on CBS in the US, becoming the first SpongeBob episode to premiere on a network outside of Nickelodeon, before airing on Nickelodeon, and was rated TV-PG instead of the usual TV-Y7 rating. The Patchy segments were also removed in the CBS broadcast.
This episode was also presented in widescreen format (16:9 or 1:78:1) making it the last non-season 9 episode in widescreen, the first one being Season 6's Truth or Square.
The original title card had the title in red and white with "SpongeBob" inside a white oval.
This is the second time that SpongeBob, Patrick, Squidward, and Plankton are seen in stop motion form, the first being in a Merry Nickmas short.
The stop motion form of Plankton does not exist during the scene where Toybob was lowered from the ceiling, as it can be seen that the Plankton puppet is being shaken while the SpongeBob is lowered from the ceiling. This, however, has not been confirmed.
Patrick mentions Fort Knox, a landmark in Kentucky. Fort Knox stores pure gold.
When Patchy flaps his hands and flies with joy, he is making a reference to Kris in Santa Claus is Comin' to Town.
"Randolph the Red Nosed Seahorse" is an obvious parody to "Rudolph the Red Nosed Reindeer."
This episode parodies the Rankin/Bass Christmas specials with their use of stop-motion animation in specials such as Santa Claus is Coming to Town, Rudolph the Red-Nosed Reindeer, The Little Drummer Boy, Jack Frost etc.
SpongeBob does not wear a helmet in Sandy's treedome.
In an interview with Screen Novelties, it was revealed that this is because it would have been very expensive to have a helmet on SpongeBob, and because of the time frame that they had to animate.
When SpongeBob finishes decorating his house, the lights on the door disappear.
Right before the commercial break, right after Patchy realizes he survived the car accident, he holds up a fork that has three tines instead of four.
Santa Claus has always been said to visit when everyone is asleep, yet in It's a Spongebob Christmas, he's visiting while everyone is awake.
SpongeBob's craters are yellow throughout the entire episode. This was because it would be hard to stick them in, they could fall off.
Santa should have been able to see that Plankton was responsible for everyone acting like jerks.
Santa also should've been able to tell that ToyBob was the one wreaking havoc not SpongeBob.
There was an error on Nickelodeon UK on November 18, 2012. Nickelodeon aired about 2 minutes of It's A SpongeBob Christmas! before switching to the episode ""Frozen Face-Off." This occurred at 9AM US time.
At first, Pearl ate the fruitcake and then became a jerk, but a little while later in the background, she isn't a jerk.
Mr. Krabs wasn't a jerk when SpongeBob is walking around town during Christmas, however when SpongeBob sings "Don't be a Jerk, It's Christmas" he is a jerk. The same goes for Mrs. Puff.
A sneak-peak trailer for It's a SpongeBob Christmas! was released in mid-2012 for a preview of the episode.