Accidentally claimed a dependent when I shouldn't have.

[ktarque]

Hi all, this past year I accidentally added my son as a dependent when my husband already did. We are married but filing separately. When I added him he did qualify for the child tax credit. My total refund at a Federal level was about $900. Today we received a 1040x notice because of this mistake. I understand I have to amend my tax return to remove him, my question is what will happen afterwards? Will I have to pay back the $2,000 child tax credit? I know this process takes a while but would like to know what to expect.

[bluedeb]

The Child Tax Credit is a non refundable credit, which means it reduces your tax liability (income you are taxed on).  When you do your amended return, you may owe some money back because part of the child tax credit reduced your income you are taxed on, which in turn you received a refund. 

You need to do the amended return because it would be hard for anyone here to tell you what or if you would owe money back to the IRS.  If you end up owing, you should pay the amount as soon as possible because the amount owed will incur penalty & interest until it is paid in full.

[xmasbaby0]

So you filed as married filing separately and both of you claimed your child?  It is surprising that one of your returns was not rejected unless one of them was mailed instead of being e-filed.  Why did you file separate returns--usually the worst way to file?  You lose a lot of possible credits by filing MFS--you lose the childcare credit, earned income credit, and education credits, and you have a lower income on which to receive the refundable portion of CTC--the "additional child tax credit."

If you are going to amend your return, you could amend to file joint instead of just amending to remove the dependent from your MFS return, if you and your spouse can agree to file jointly.

https://ttlc.intuit.com/community/amending/help/how-do-i-amend-married-filing-separately-returns-to-...

If you were legally married at the end of 2018 your filing choices were married filing jointly or married filing separately.

Married Filing Jointly is usually better, even if one spouse had little or no income. When you file a joint return, you and your spouse will get the married filing jointly standard deduction of $24,000 (+$1300 for each spouse 65 or older)  You are eligible for more credits including education credits, earned income credit, child and dependent care credit, and a larger income limit to receive the child tax credit.

If you choose to file married filing separately, both spouses have to file the same way—either you both itemize or you both use standard deduction. Your tax rate will be higher than on a joint return. Some of the special rules for filing separately include: you cannot get earned income credit, education credits, adoption credits, or deductions for student loan interest. A higher percent of your Social Security benefits may be taxable. Your limit for SALT (state and local taxes and sales tax) will be only $5000 per spouse. In many cases you will not be able to take the child and dependent care credit. The amount you can contribute to a retirement account will be affected. If you live in a community property state, you will be required to provide additional information regarding your spouse’s income. ( Community property states:  AZ, CA, ID, LA, NV, NM, TX, WA, WI)

If  you are using online TurboTax to prepare your returns, you will need to prepare two separate returns and pay twice.

https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately

https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-states

https://ttlc.intuit.com/questions/1894449-is-it-better-for-a-married-couple-to-file-jointly-or-separ...