IRS Notification of error related to Refundable Child Tax Credit, it's about SCHEDULE 8812 sheet 5

[nifei]

I received a notification from IRS today, to say I owe $1,000 which is due to an error in my Form 1040 about Refundable child tax credit.

look like IRS is expecting the highlighted cell to be $1,000, but I'm not sure why, 

My total income is between $150,000 and $400,000, I think it would be apply to this:

First phaseout: Income exceeds the above thresholds but is below $400,000 (married filing jointly) or $200,000 (all other filing statuses). Your total credit per child can be reduced by $50 for each $1,000 (or a fraction thereof). This phaseout will not reduce your credit below $2,000 per child.

In this case,  each child's credit would be still $2,000, is my understand correct?

[RaifH · Accepted solution]

Yes, you are correct. Even if your income was above $400,000, that line would still be $2,000 for you. The reduction for incomes above $400k doesn't come until lines 11 and 12. If your child qualifies for the child tax credit, your line 5 amount should be at least 2,000. If they don't, it should be 0. I'm not sure how they could come up with 1,000. Take a look at the Line 5 worksheet. 

Could they be challenging a different number on Form 8812 or saying that your child does not qualify? The only thing that comes immediately to mind is if you received advanced child tax credit payments and did not report them on Line 14f.

[nifei]

Thank you very much, RaifH,

I didn't receive any advanced child tax credit payments, which could be due to our income is beyond $150,000.

In addition,  one of  my child has SSN, another one has ITIN, so the overall child tax credit could be 2000 + 500 = $2500, not sure why IRS said it could be just $1500.

Here are those possible reasons listed in the letter:

1. The computation of the credit on Schedule 8812 was incorrect.

2. The amount on Schedule 8812 was not transferred correctly to yourself tax return

3. You received advance child credit payments but did not reconcile them or reconciled them incorrectly.

It's not #3 as I explained, and I think it's also not #1, not sure what does #2 mean? any idea?

Thanks.
Fei

[JohnW152]

Option #2 means that you figured the correct amount on Form 8812, but transferred it to Form 1040 incorrectly.  And that’s extremely unlikely when you’re using a tax program. 

You are talking about your tax year 2021 return, correct?

If you can’t figure this out, there should be contact information on the IRS notice.  You may or may not be able to get through on the phone lines in a reasonable amount of time, but you should be able to reach out by mail, anyway, to see what the issue was.  

You might also check the IRS’ Your Online Account tool.  You can double-check to make sure you didn’t receive any advance child tax credit.

[nifei]

Yes, John,

I'm talking about my 2021 return.

I checked my IRS online account. I didn't find any record about advance child tax credit.

Yes, I saw the contact information on the IRS notice, I may have to call them directly to see what's going on.

Thanks.
Fei

[KrisD15]

Just to clarify, 

are you filing Married Filing Joint and if so, did your spouse get any advance payments? 

[nifei]

Yes, this is Married Filing Joint.

BTW, I checked my bank account, I did receive $167/166 biweekly for last 3 months of 2021.

I believe this is so-call $1000 advanced child credit.

I think, it's clear to me now, I will just pay it to IRS through the instructions from the letter.

Thanks.
Fei

[KrisD15]

"In addition,  one of  my child has SSN, another one has ITIN, so the overall child tax credit could be 2000 + 500 = $2500, not sure why IRS said it could be just $1500."

Yes, so if you did receive 1,000 advance payments, and the IRS says it should be a 1,500 credit, that would get you to the 2,500 for both children. 

Glad you figured that out. 

[Parks1977]

Can anyone supply more information on this issue?  Impossible to reach anyone at the IRS.  My submitted 8812 to the IRS showed $4,000 in Child Tax Credit.  Joint income is between $300K-$350K, thus we should still qualify as $400K is the income limit.  We have two children ages 13 and 17 (both under age 18 with qualifying SSNs).  We received no child tax credit payments.  

My federal tax refund went from roughly $1690 to now "oweing" $311.  Seems to me the $4,000 was changed to $2,000 (as $1690 + $311 = $2000).  

Did the IRS make a change??  Are they only allowing $1000 per child now?  Just lost on how to solve this issue before my payment is due.  Ugh!!

[DoninGA]

@Parks1977 

The Child Tax Credit begins to be reduced to $2,000 per child if your modified AGI in 2021 exceeds:

• $150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
• $112,500 if filing as head of household; or
• $75,000 if you are a single filer or are married and filing a separate return.

The first phaseout reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you.

The Child Tax Credit won’t begin to be reduced below $2,000 per child until your modified AGI in 2021 exceeds:

• $400,000 if married and filing a joint return; or
• $200,000 for all other filing statuses.

The second phaseout reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you.

[puckhog]

Thanks for posting, I have the same issue.  Two kids 15 and 17.  Turbo Tax calculated a $4k child tax credit, and the IRS wants $2000 from me.  Turbo Tax did the calculation and I did not receive any advanced payments.

[eenee814]

Hi, I received same letter from IRS. 

Here are those possible reasons listed in the letter:

1. The computation of the credit on Schedule 8812 was incorrect.

2. The amount on Schedule 8812 was not transferred correctly to yourself tax return

3. You received advance child credit payments but did not reconcile them or reconciled them incorrectly.

My submitted 8812 to the IRS showed $3,000 in Child Tax Credit.  Joint income is below $150K,   We have two children ages 19 and 17 ( under age 17 with qualifying SSNs).  We received $250 every month for 6 months.  Is the child tax credit payments?  I didn't received Letter 6419.    

[angelordevil77]

I have the same issue and I triple checked my numbers and entered everything correctly.  Is this a TurboTax error or did the IRS change something? It is like they are only giving me $1000 credit per kid for 15 and 16 year old.

[mobiustax22]

I am facing the same problem. Turbotax put $2000 child tax credit for my 13 year old kid but the schedule 8812 worksheet only gives $1000. I ended up owing $1000 plus penalty and interest. So mad.

[puckhog]

I went through the ordeal of getting an IRS account, painful, to find out that the IRS had been putting the tax credit directly in my bank account.  I then went to my bank account and verified that 6 checks of $333 had been deposited.  I did not receive any notification of their deposits or any form at tax time.  You should not need to get the IRS account, just check your bank account for IRS deposits last year.