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Returning Member
posted Apr 8, 2022 4:51:08 PM

IRS rejected return, miscalculated Child Tax Credit

I just received a notice of adjustment from the IRS for a miscalculation of the Child Tax Credit. They note that the error is on Schedule 8812. All calculations are correct but TT gives full credit for a child even though they turned 17 during the tax year. According to calculations on TT the age deadline is 18 but that is not what the IRS is stating. If they turned 17 during the year the program should apparently disallow the $2000 credit but it didn't. How can this be rectified? Everything is entered correctly and this is a calculation error within TT. Any help is appreciated.

V/R,

SA

0 5 741
5 Replies
Level 15
Apr 8, 2022 5:22:56 PM

The tax law changed for 2021 tax returns.   You can get the child tax credit for a child who was younger than 18 at the end of 2021.   Check the date of birth you entered for your child.

 

From the IRS:

A1. For tax year 2021, the Child Tax Credit increased from $2,000 per qualifying child to:

  • $3,600 for children ages 5 and under at the end of 2021; and

  • $3,000 for children ages 6 through 17 at the end of 2021.

Note: The $500 nonrefundable Credit for Other Dependents amount has not changed. For more information about the Credit for Other Dependents, see IRS Schedule 8812 (Form 1040), Credits for Qualifying Children and Other Dependents.

Expert Alumni
Apr 8, 2022 5:29:29 PM

First be sure the notice is from the IRS.  Call the IRS at 1-800-929-1040 and ask for clarification because the qualifications below are direct from their website:  

 

To be a qualifying child for the 2021 tax year, your dependent generally must:

  • Be under age 18 at the end of the year
  • Be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of one of these (for example, a grandchild, niece or nephew)
  • Provide no more than half of their own financial support during the year
  • Have lived with you for more than half the year
  • Be properly claimed as your dependent on your tax return
  • Not file a joint return with their spouse for the tax year or file it only to claim a refund of withheld income tax or estimated tax paid
  • Have been a U.S. citizen, U.S. national or U.S. resident alien

Child Tax Credit 

Returning Member
Apr 8, 2022 5:35:19 PM

Thank you for the response. Everything is entered correctly in TT(I've triple checked).  I have two children both under 18 but IRS just sent me a bill saying the $4000 amount, which is autogenerated from TT, is incorrect and should be $2000, so I owe them money! I also read the tax credit information showing $3000 per child and it seems one could argue that I should actually be getting a $6,000 credit. This just complicates things even more as I can't even see how TT calculated things because the Line 5 Worksheet is unviewable. 

Returning Member
Apr 8, 2022 6:13:41 PM

I just did the Line 5 worksheet from the IRS and it looks like the IRS and TT are wrong and the amount should actually be $6000. Which means I actually should be getting a bigger refund and not actually have to pay as the IRS letter suggests. It appears TT is calculating the value based on old information and the IRS is using even older information. This is very problematic.

Level 15
Apr 8, 2022 6:15:36 PM

@scarmstr There should be a number to call on that letter.   Call and dispute the change.   The IRS does make mistakes and it sounds like they made one with your return.