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

[waijai21]

I got the same notice. But said I owed $500.

Married Filed Jointly with my wife. I received one Letter 6419 for $500. Schedule 8812 was filled out accordingly. Just checked bank accounts, and apparently, IRS deposited 6 amounts totaling $1000, with no notice. Apparently, I'm assuming the missing $500 was from my wife's side, but she never received a Letter 6419, so we never knew about it. Glad gov't was trying to help by giving CTC payments in advance, but this was poorly communicated and executed. At least there was no penalty... I think...

[anthro888]

I think we are all in the same page here. In my opinion this was a screw up from turbotax, not the IRS. this is why we pay for this expensive software so they can avoid big errors like this one. looks like all of us here are either $1000 or $2000 out. that is a big surprise and a big hassle to deal with after the fact. 

"You received advance Child Tax Credit payments but did not reconcile them or you reconciled them incorrectly" we all received this if you had a child since most of us make less than $400,000. turbotax should have caught this early on. I will be putting a blog with detail information about this very issue.

[NCperson]

@anthro888 - here is the biggest source of confusion.... did you file joint?  if so, there were TWO letters sent to you (one to you and one to your spouse), you were to ADD these two letters together and enter the result in TT.

In other cases, the family only received one of the letters and didn't know there was really a 2nd one.  

The point is you had to enter the advance  you actually received, whether you received the letters from the IRS or not 

From many posts I've seen, many failed to do that. 

[BeaverDamn]

Yes filed joint and both amounts were entered into TT.

[bluedawg]

as with others, missed the payment to my spouse and IRS alerted us we owe.  That's fine.  But as I went back over my taxes, I have a question stemming from line 5 of Form 8812.  I have 2 kids, 14 and 17 with SSNs (as of 2021 end), we're married filing joint.  From the line 5 worksheet, I get 6000 and turbo tax calculated 4000.  Am I missing something?  This would actually change me owing the IRS $1000 to them actually owing me $1000.

[xmasbaby0]

@bluedawg What tax year are you asking about? 

For tax year 2021 you had to enter the information for both spouses for the advance monthly child tax credit payments.  Each of you would have received letter 6419 for that.   The CTC amounts for 2021 were $3600 for children younger than 6, and $3000 for children aged 6 to 17.   The remaining part of the CTC you could get for 2021 was on line 28 of your 2021 Form 1040.

The tax laws have changed for 2022.

 If you are asking about tax year 2022, the "old" rules are back for the child tax credit.   The CTC is $2000, with a maximum "refundable" amount of $1500 -- the additional child tax credit.  You can only get the CTC for 2022 for children YOUNGER than 17 at the the end of 2022.

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

[bluedawg]

2021 tax year.  I understand the part about the advance tax payment.  Seems I got a 6419 and we missed (or didn't receive) the one for my wife.  That's not the issue, but what triggered me to re-calculate my 8812 for the CTC.

So based on the line 5 worksheet for 8812, the maximum amount I could get would be $3000 per child (ages 14 and 17) which is $6000 (2x $3000).   I don't understand why TT calculated $4000 for the 2021 year?  Don't really care, just want to know what is the correct amount.

So by TT, line 5 8812  was $4000. Less the $1000 i reported that I received = $3000 which is what I claimed. (line 28 1040)  My error was that we received $2000, so $2000 is what should have been claimed on line 28 1040 for credit as per the IRS.  That makes sense.   But, I should have claimed a $4000 credit on line 28 1040 based on the $6000 from line 5 of 8812 less the $2000 advance payment.  So TT didn't calculate the total credit correctly on line 5 of the 8812.  Does this make sense?

So how do i address this -contact IRS? amended return?

[xmasbaby0]

You have not mentioned your income.  You may have been subject to a lower amount of CTC if your income was too high.

Q C2. Can my Child Tax Credit amount be reduced based on the amount of my 2021 income? (added June 1...

A2. Yes. The Child Tax Credit phases out in two different steps based on your modified adjusted gross income (AGI) in 2021.

The first phaseout can reduce the Child Tax Credit to $2,000 per child.

• That is, the first phaseout step can reduce only the $1,600 increase for qualifying children ages 5 and under, and the $1,000 increase for qualifying children ages 6 through 17, at the end of 2021.

The second phaseout can reduce the remaining Child Tax Credit below $2,000 per child.

For additional information on the amounts of modified AGI that reduce the 2021 Child Tax Credit, see Q C4 and Q C5, below.

Q C4. How does the first phaseout reduce the 2021 Child Tax Credit to $2,000 per child? (added June ...

A4. 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.

[bluedawg]

got it -we're above $150K married filing jointly AGI is $220.   So our max is $2000 per child (ages 14 and 17) rather than $3000.

[DoninGA]

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@bluedawg wrote:

got it -we're above $150K married filing jointly AGI is $220.   So our max is $2000 per child (ages 14 and 17) rather than $3000.

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For tax year 2022 the Child Tax Credit is only available for children under the age of 17.  The 17 year old is only eligible for the Other Dependent tax credit of $500.