I have 3 qualifying children and my income is well below the limit, but turbo tax is calculating that I receive only $800 when I should be receiving the full $6,000
Did you check your tax liability first?
The Child Tax Credit is technically non-refundable, meaning it can only lower your tax liability.
Once your tax liability has zero'ed out, it becomes the "Additional Child tax Credit" and at that time increases your refund.
Check your 1040 and make sure the children are listed as your dependents and that the box saying they are eligible for the child tax credit is checked.
Look at your 1040 line 28 to see if the credit became the Additional child tax credit.
(the child tax credit is on line 19)
(look at line 22 to see if your tax was zero'ed out)
To View Your 1040 in TurboTax Online
After 2021's generous child tax credit, many people are surprised this year by how much less they are receiving.
The tax laws changed for child-related credits and are much less generous for 2022.
Make sure you have entered your child as a dependent in My Info, and that you have entered the child's Social Security number. Careful— do not say that your child’s SSN is not valid for employment. If your child was born in 2022 make sure you said he lived with you the whole year. There is an oddly worded question that asks if the child paid over half their own support. Say NO to that question.
Have you entered income from working in 2022? If not, you will not receive an income tax refund based on having dependent children.
The rules for getting the child tax credit on a 2021 tax return and now on a 2022 return are very different. For 2021 you could get $3600 for a child under 6 or $3000 for a child between 6 and 17 even if you had no income/did not work. That is NOT the way it will work for your 2022 tax return. The “old” rules are back.
The maximum amount of the child tax credit is now $2000 per child; the refundable “additional child tax credit” amount is $1500. In order to get that credit, you have to have income from working. The credit is calculated based on the amount you earned above $2500 multiplied by 15%, up to the full $1500 per child.
If your child is older than 16 at the end of 2022, you do not get the CTC. But you may still get the non-refundable $500 credit for other dependents instead.
https://ttlc.intuit.com/questions/1900923-what-is-the-child-tax-credit
And for the Earned Income Credit—-the rules are back to the “old” rules—
Those under 25 and over 65 without children are not eligible as they were uniquely in 2021. And you cannot use your income from any earlier tax year to get the EIC for a 2022 return. There is no “lookback” for 2022. EIC for 2022 will be based on the income you earned by working in 2022.
https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant
Look at your 2022 Form 1040 to see the child-related credits you received
PREVIEW 1040
https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing
Child Tax Credit line 19
Credit for Other Dependents line 19
Earned Income Credit line 27
Additional Child Tax Credit line 28
Does being on social security remove getting Child Tax credit for granddaughters we have been raising since 2010?
we usually get the credits but this year got 0 when we evoked our taxes with Turbo Tax
@Cheryl1958 Sorry---the tax laws changed a lot for 2022. If your income is Social Security you will not be able to get child-related credits. For 2022, the child tax credit is based on income earned from working.
Yes, having income from only social security would prevent you from getting the CTC. If you do not have earned income, then you are not eligible for the Child Tax Credit or Additional Child Tax Credit. The rules for 2021 were different than other years, but in all other years, you do have to have income from working to get the credit.
Isn’t that crazy (but doesn’t surprise me with all the other changes recently)… retired due to business shortage during covid and fact the gurls are teenagers now and require full day of availability from both of us . Worked in insurance 45 years and hubby had construction company for 50+. Ugh!
I received a letter from the IRS stating that my refund had been reduced from what Turbo Tax said it should be because there was an error in the area of Child Tax Credit/Credit for other Dependents. From what I can tell everything on the 1040 is correct so I am confused. Did Turbo Tax not calculate correctly?
@lwright1 Was that IRS letter for your 2021 tax return? Did you make a mistake on your 2021 return and forget to enter the advance monthly child tax credit payments they sent to you between July and December of 2021? Lots of people made mistakes with that.
If you received monthly child tax credit payments of $250 or $300 per month between July and December of 2021, then you got letter 6419 from the IRS, and you were required to enter the amount of the advance payments. Only the remaining amount of the CTC should have been on line 28 of your Form 1040. If you filed a joint return they sent letter 6419 to each of you and you had to enter the amounts from each letter.
The IRS knows how much they sent to you so they checked line 28, and if you had too much on that line, they reduced your refund.
No. It specifically says 2022. I did everything through Turbo Tax so I didn't actually enter the numbers in the boxes. I just answered the questions. In 2021 we did receive the payments during the year and I accounted for that on our 2021 return.
t would be helpful to have a TurboTax ".tax2022" file that is experiencing this issue.
You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions:
If using Turbo Tax online:
At the top menu in the black line at the top of the page go to Online.
@DaveF1006 I have Turbo Tax open but only see Tax Home and Tax Documents in the Black Left menu bar.
It sounds like you have already completed and submitted your return. in this case, you can still send me the file by going to Add a State in the bottom of your landing page in the right pane. This will place you back into the return. Once there:
Good news!! I have reviewed your file and you received the full $8000 child tax credit for your four dependents. It is broken up on your 1040 with $2000 reported on line 16 of your 1040 as a child tax credit and $6000 reported on line 28 as an additional child tax credit.
Your full amount is there like it should be.
@DaveF1006 so why did the IRS send a letter stating there is an error on the form having to do with Child Tax Credit/Credit for Other Defendants and refund a significantly smaller amount? I am just trying to figure out if the 1040 really is correct and it is a problem with the IRS or if there is an error on the1040. I talked to the IRS for over an hour yesterday and the representative only said they made an adjustment. It looks like they are saying the problem lies in Line 28 - Additional child tax credit from Schedule 8812. As you said my 1040 has $6000 reported there and they have changed it to $2710.20.
They either adjusted your income, other tax credits, or one of your dependents did not qualify. Here are the requirements for the Child Tax Credit. What line items besides #28 changed? Or what other information does the letter have - it should tell you what they adjusted.
@DawnC - They listed the tax calculations on my 1040 verses their calculations and the adjusted gross income and taxable income both match. Then they listed payments and credits. Income tax withheld (25d) matches as does Estimated tax payments (26). The only difference is lines 27-30. My 1040 has 6000 listed on line 28 and 0 on Line 27,29,30 as @DaveF1006 already noted but their calculation is $2710.20. That is where the discrepancy in the amount refunded comes in. I am trying to understand why they changed it.
All four of my children should qualify as they are 5, 8, 8, and 10 years old.
The rules for getting the child tax credit on a 2021 tax return and now on a 2022 return are very different. For 2021 you could get $3600 for a child under 6 or $3000 for a child between 6 and 17 even if you had no income/did not work. That is NOT the way it will work for your 2022 tax return. The “old” rules are back. The maximum amount of the child tax credit is now $2000 per child; the refundable “additional child tax credit” amount is $1500. In order to get that credit, you have to have income from working. The credit is calculated based on the amount you earned above $2500 multiplied by 15%, up to the full $1500 per child. If your child is older than 16 at the end of 2022, you do not get the CTC. But you may still get the non-refundable $500 credit for other dependents instead.
@lwright1
@ShirlynW I did see that 2021 and 2022 are different and read your same explanation on another post. However, my question is if Turbo Tax is calculating it correctly. Turbo Tax entered my 4 children all under 16 as $2000 child tax credit and $6000 Additional child tax credit from Schedule 8812.
The IRS has changed that to $2000 child tax credit and $2710 Additional child tax credit.
Per IRS: For 2022, the initial amount of the CTC is $2,000 for each qualifying child. The credit amount begins to phase out where modified adjusted gross income exceeds $200,000 ($400,000 in case of a joint return).
The amount of the CTC that can be claimed as a refundable credit is limited as it was in 2020 except that the maximum ACTC amount for each qualifying child increased to $1,500.
A child must be under age 17 at the end of 2022 to be a qualifying child.
@DawnC I explained in an earlier post that my (Turbo Tax) calculations for Adjusted gross income and taxable income match as well as Income Tax Withheld. The only difference is the Other Credits from lines 27-30 which was changed from $6000 to $2710.20. The letter states "We found an error on your 2022 Form 1040, which affects the following area of your return: Child Tax Credit/Credit for Other Dependents."
All 4 kids are under 16 and have been listed as my dependents for multiple years.
If your children were all under 17, your income was lower than the phaseout range, you met the other requirements for the credit, and the IRS letter doesn't identify any other adjustments besides Additional Child Tax Credit (lines 27-30), contact the IRS as soon as possible and request an explanation for the adjustment. Follow the instructions provided in the letter.