The Child Credit increase included in the Covid relief package reduced my tax obligation. I filed early March and already paid the IRS.
I read on IRS website that the Child Credit increase can be applied to 2020 filing, and when I log into TT acc the 2020 TAX due for Federal is 1k less that what was due when I filed and already paid, which lead me to believe that the child credit increase is applicable for 2020.
I am now trying to amend my 2020 filing so that I get refunded the 1k difference. When I try to file the amendment it also picks up State. Can I by pass the State and only amend Federal?
Yes, you can skip the state amendment and only file the federal Form 1040X. But the Child Tax Credit increase is effective on the 2021 tax return. If you had unemployment that was excluded, that may have changed the amount of your 2020 Child Tax Credit. You can verify the amount of your child tax credit by looking at Form 1040 (Lines 19 and 28). For your 2020 return, you are allowed to use your 2019 earned income amount to calculate the amount of your 2020 EIC or CTC, but the CTC is still $2K for 2020.
IR-2021-71, April 1, 2021 - - There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return.
For example, the IRS can adjust returns for those taxpayers who claimed the Earned Income Tax Credit (EITC) and, because the exclusion changed the income level, may now be eligible for an increase in the EITC amount which may result in a larger refund. However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits but now are eligible because the exclusion changed their income.
REGARDING THE CHILD TAX CREDIT
Beginning in tax year 2021(the taxes you file in 2022) the Child Tax Credit will be expanded. The bill increases the amount that families claiming the Child Tax Credit receive from $2,000 to:
The credit is now fully refundable – that means that you are eligible for the credit even if you don’t owe taxes.
Although this credit is for next year’s tax filings, payments will also be sent in advance, over the course of the year, beginning no earlier than July 2021 so people don’t have to wait to file their 2021 taxes. The IRS will likely determine eligibility based on your most recent tax filing.