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

[SweetieJean]

 my submission was verified by TurboTax -

Please understand that TurboTax cannot verify that the data you entered (or questions you answered) is correct.  That's why the IRS makes adjustments, based on their records (to which TT does not have access).

[BeaverDamn]

@Theunknownknight  @NCperson

1) total due is $1488.76

2) $2500

Income is >150K

I forgot I cannot claim the 12 year old since it's his father's turn this year so I only have a 3 and 5 year old to claim for 2021.

Checked bank statements and total amount is $3000.

Is this enough to file an appeals?

[NCperson]

@BeaverDamn @ - Let's see if we can't figure this out.

I asked if your income was over $150,000 and what I really should have asked is if it over $200.000 as the benefit is reduced if so.  I'll assume that your income is below $200,000 but we can adjust as necessary. 

1) You were entitled to $7200 ($3600 for each child under the age of 6)

2) That is reduced by whatever is on Line 11 of Form 8812 (it'll be blank if your AGI is below $200.000 as I assume you did NOT file joint-married) PLEASE CONFIRM WHAT IS ON LINE 11 of form 8812

3) then subtract the $3000 you already received (which is a weird number as that is two children over the age of 5).  In fact, if you claimed all 3 children in 2020, then I would have expected the Advance to be $850 per month for 6 months or $4800.   That makes a lot more sense since $7200 from 1) above less $4800 is the $2500 you state you had on Line 28.  Please review your bank statements again 

4) have you actually filed or are just just aghast at what you owe???? if you filed and got an adjustment letter from the IRS,  how much of a refund were you expecting to receive when you filed (we need to add that expected refund to the $1488 to understand how much the IRS adjusted)

5) what did the IRS letter state was the reason for the adjustment?  Nornally they give 5-6 possible reasons, and if they all relate to the Child Tax Credit, that is all I need to know.

6) what is on lines 14f and 14i of Form 8812? 

anwering my questions is not going to get us all the way to the answer, but it is going to get us a lot closer to understanding what occured.  Pleaser respond and I may have one othe round of questions that will figure this out.

[bwessely]

Well, the IRS link for Line 5 Worksheet https://www.irs.gov/instructions/i1040s8#en_US_2021_publink100077560

shows that they subtract 2000 from 3000 to get 1000 (one child under 18) for line 5 - but Turbo Tax calculated this as 2000 for my return.  there's no worksheet in Turbo Tax to see the mistake, but this sounds like intuit's mistake - at least as to penalty/interest. ?

[NCperson]

@bwessely - go back and review your bank statements from July, 2021 - Dec, 2021 - right around the 16th each month.  DO NOT DO FROM MEMORY. 

the calculation is 

$3000 for your child age 6-17 LESS

what you received from July - Dec, 2021.

(I assume you filed joint and make less than $400,000) 

appears you entered that you received $1000 (which is why you have $2000 on Line 28), but I bet you received $2000 (which is why the IRS comes up with $1000 on Line 28).

do you have Letter 6419 that states you received $1,000? did you file a joint return in 2020 and 2021?  There were TWO letters, addressed to each spouse and each one would have stated you received $1,000, but you had to add them together since you are filing joint..... is that what happened????

[bwessely]

I found the issue - the IRS sent the advance payments for each parent and I never saw my wife's 6419.  So the $500 net due is correct.

Thx.

[BeaverDamn]

@NCperson 

1) Checked all bank statements 3 times and verified I only received $3000 in 2021.

2) Line 11 states $0. I did file Joint married and AGI is >$200K but under <$400K.

3) $7200-$3000=$4200? (again only received $3000 in 2021)

4) Totally AGHAST! I didn't expect a refund but definitely did not expect an IRS based adjustment in owing $1500!

5) IRS Reason

"We changed teh refundable Child Tax Credit amount claimed on your tax return because there was an error on Schedule 8812, Credits for Qualifying Children and Other Dependents, in one of the following:

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

-The amount on Schedule 8812 was not transferred correctly to your tax return.

-You received advance Child Tax Credit payments but did not reconcile them or you reconciled them incorrectly."

6)14f = $1500 and 14i = $2500

[NCperson]

@BeaverDamn - Here is the problem 

When you completed your return originally, you entered that you received $1500 in the advance child tax payments.  That is why I asked what is on line 14f.  Since you entered $1500 and now state it was really $3000, that explains the $1500  the adjustment the IRS made.  I find that most filing joint make the same mistake: you received Letter 6419 from the IRS stating how much you received, but THERE WERE TWO LETTERS, one addressed to each spouse.  When TT asked how much YOU received in advance, you needed to ADD BOTH LETTERS TOGETHER.  I suspect that is why you originally entered $1500 and not $3000-  the 2nd letter.

2) your benefit is limited to $4000 ($2000 per child) due to your income.  So originally, you had a $4000 benefit less the $1500 you stated you had already received, so Line 28 was the remaining $2500.

3) but now we know: You had a $4000 benefit less the $3000 you had already received, so Line 28 should have been $1000, which is $1500 less that it was upon submission, leading to a $1500 reduction in refund / increase in what you owe.

make sense? 

[BeaverDamn]

@NCperson 

Makes sense! although I only recall and have 1 x 6149 letter.

Do I just call the IRS to make this adjustment or try to go through TT to make a modification to my return?

Appreciate this advice!

[NCperson]

@BeaverDamn - even easier - the IRS has already made the adjustment - no amendment or further adjustment is necessary on your part.... you just have to pay the amount noted in their letter.....you can pay online if you want 

https://directpay.irs.gov/directpay/payment?execution=e1s1

[BeaverDamn]

@NCperson 

Darn I was hoping it was their mistake and I didn’t owe the $1500.   =(

[hadjwold]

@NCperson 

Hello, I have the same situation as the person above. 

We are married filing jointly. We make <150,000 combined. 

We have two children under the age of 6. 

I have entered on line 14f=2400 and 14i=4800. I only received 2400 between July 2021 and December 2021. They are saying that I owe 1200. 

I can't find what the issue is after looking at this thread. 

My only guess for some reason is that they are saying  my children are over the age of 6. Because then the math would be 2x3000 = 6000 minus 2400 (what I have received) = 3600. Which would have gone on life 14i. And the difference between what I put for 14i and this calculation is 1200... If that is an error on there end, what do I do? 

Can you help? 

[NCperson]

@hadjwold - please go back to your bank account statements and review what you received from July - Dec, 2021.  With two children under 6, did you receive $600 per month for 6 months, which is the normal or expected payment?  DO NO RELY ON YOUR MEMORY. Please take the time to open all 6 of those bank statements!

What you told turbo tax is you received $2400 (line 14f of Form 8812). 

but the IRS believes that it sent you $3600, hence the difference owed of $1200. 

Also, what year(s) were your children born? if they were born in 2016 or afterways, they are 'under 6'  for this tax credit.  You can see that on Line 4a and 4b of Form 8812.  there should be a '2' on those lines for you.  Please confirm that when you respond. 

let me know what you find!

[jadebow]

Same situation, same thing happened with me. Went from having a refund to owing about $1900.  TurboTax Deluxe didn't catch this issue.  Quite an unpleasant experience.  My only resolution was to pay, of course, and to write this answer, that I share your pain.  My 5-star opinion of TurboTax is now a 2-star.  I'll be looking for alternative software next tax season and I'm not recommending TurboTax to any friends from now on.

[NCperson]

@jadebow - while I appreciate your poor experience, and note I am not affiliated with Turbo Tax in any way....turbo tax could not catch the issue if the amount you entered that you received did not match the IRS records...... 

1) look at Line 14f of Form 8812 - that is what you entered into Turbo Tax as the amount received. Turbo Tax prompted you for this informatoon

2) Now, review you bank account records from July - Dec, 2021 for the IRS direct deposits . Please do not do this from memory.  This is what the IRS records show they sent you

if 1) and 2) do not match, THAT is why the IRS adjusted your return - it was because of what you entered......Turbo Tax would not know what the IRS sent you - only you would know.

what did you find?