cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 1

Turbotax says that I am not eligible for the refund if I do not owe any taxes to IRS. Are we eligible for the child tax credit, even if we don't owe to IRS?

 
1 Best answer

Accepted Solutions
Level 9

Turbotax says that I am not eligible for the refund if I do not owe any taxes to IRS. Are we eligible for the child tax credit, even if we don't owe to IRS?

The money you hear about people getting for just filing a tax return claiming kids requires them to  have some earned income (wages or self employment). Without earned income, they are not eligible for the "refundable" Earned Income Credit or Additional Child Tax Credit.  Both credits are calculated on the amount of earned income you have. No earned income means no "refund". A small amount of earned income means a small refund. The child tax credit does not "kick in" unless you have at least $2500 of earned income.


4 Replies
Level 9

Turbotax says that I am not eligible for the refund if I do not owe any taxes to IRS. Are we eligible for the child tax credit, even if we don't owe to IRS?

The money you hear about people getting for just filing a tax return claiming kids requires them to  have some earned income (wages or self employment). Without earned income, they are not eligible for the "refundable" Earned Income Credit or Additional Child Tax Credit.  Both credits are calculated on the amount of earned income you have. No earned income means no "refund". A small amount of earned income means a small refund. The child tax credit does not "kick in" unless you have at least $2500 of earned income.


Level 1

Turbotax says that I am not eligible for the refund if I do not owe any taxes to IRS. Are we eligible for the child tax credit, even if we don't owe to IRS?

Thank you for the response. My AGI is $190,000; and I paid more taxes than needed. So, I will be getting a refund. Now the systems says that I am not eligible as I am receiving a refund. (not because I did not have income more than $2500). Do I need to correct the entries somewhere in the system to get the refund?
Level 9

Turbotax says that I am not eligible for the refund if I do not owe any taxes to IRS. Are we eligible for the child tax credit, even if we don't owe to IRS?

The statement "Turbotax says that I am not eligible for the refund if I do not owe any taxes to IRS". doesn't make sense.

The child tax credit shows on line 12a of form 1040. Turbotax will Prepare the child tax credit worksheet to show how a lesser amount was calculated.

 There are 6 possible reasons; you aren’t getting the Child Tax credit (CTC). It’s usually #4:
1. You’ve entered something wrong. In the personal Info section, for the dependent, you must select answers that indicate that he/she is your dependent child. If the child was born during the year, say he/she lived with you all year (note: TurboTax changed how this section is done two years ago, you may need to go thru the interview again or even delete your dependent and start over). If the child was born in 2018, you have to answer that he lived with you all year. The CTC is not an automatic $2000, per child. It is income dependent. If you haven't entered your income yet, the CTC will not show.
2. Your child may be  too old (over 16). You can still claim your child. What you can't claim is the Child tax credit. This comes as a big surprise to many parents the year their child turns 17. A child over age 16 no longer qualifies for the Child Tax credit (CTC). Although a child can still be a student dependent through age 23, and a qualifying child for EIC,  the Child Tax Credit expires the year they turn 17 and you no longer get the $2000 CTC.
3. Your income is too high. The Child Tax Credit (CTC) is phased out at higher incomes starting at $400,000 for joint filers  ($200K single). You lose $50 for each $1000 (rounding up) your income is over that threshold.   
Previously it was $75,000 for single, head of household, and qualifying widow or widower filers; and $110,000 for joint filers.
4. Your income is too low.  The child tax credit  (CTC) is also limited to your tax liability. The CTC is a non-refundable credit and can only reduce your income tax to 0, It can not help you beyond eliminating your tax liability. But, if you have more than $2500 of earned income, some or all of it is usually given back to you thru the "Additional Child tax credit". That is, part of the CTC may be on line 17 of form 1040 instead of line 12.   The  ACTC is calculated on form 8812 and  is basically 15% of your earned income over $2500. The ACTC is a maximum of $1400 per child (not $2000).
5. You are the custodial parent and the non-custodial parent is claiming the dependent this year. The CTC goes with the dependency, even though the custodial parent still gets the Earned Income Credit, Dependent care credit and Head of Household.
6. Another possibility is that part of your tax due is not regular income tax, but is self-employment, early distribution penalty or another type of additional tax, for which the CTC cannot be used.
To get a 'second opinion' on-line direct from IRS, try <a rel="nofollow" target="_blank" href="https://www.irs.gov/uac/is-my-child-a-qualifying-child-for-the-child-tax-credit">https://www.irs.gov...>

Level 8

Turbotax says that I am not eligible for the refund if I do not owe any taxes to IRS. Are we eligible for the child tax credit, even if we don't owe to IRS?

The child tax credit will lower your tax. The Additional child tax credit (which is usually what is left over) is added as a refund.