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ccossibo
New Member

Why are the 2021 advance child tax credit payments reducing my refund, taking away the other half of the credit?

 
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7 Replies

Why are the 2021 advance child tax credit payments reducing my refund, taking away the other half of the credit?

The IRS is sending out letter 6419 to you.  It will show the amount of advance child tax credit that you received during 2021.  Enter the information from that letter carefully.   The remaining amount of CTC that you can receive will show up on line 28 of your 2021 Form 1040.

 

PREVIEW 1040

 

https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing

Click on Tax Tools on the left side of the screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

 

 

NOTE:   The CTC is indeed a “credit” that can be applied toward any tax liability that you would otherwise have to pay to the IRS.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Why are the 2021 advance child tax credit payments reducing my refund, taking away the other half of the credit?

First let me point out that the Refund-O-Meter is only correct once all your income and expenses have been entered and the program is fully operational. With each entry of income or expenses the meter will continue to vary as the program recalculates the return with each step you take.  If this annoys you then turn off the meter until the end.   

 

 

Next ... the program interview flow is  poorly designed  and it  will give you a false refund total early in the interview.   The program gives you 100% of the CTC and the third stimulus credit once you have completed the MY INFO tab early in the interview  and  then much   later in the deductions & Credits tab  you are asked how much of these credits you got in advance and then the credits are adjusted for the advance payments which will show as a reduced refund amount or an increase in the balance due.  

 

Same thing for the EIC … the program gives you the credit in the refund posted BEFORE  you get to the EIC portion of the interview.  At that point it asks you a couple of questions that could possibly REMOVE the credit already reflected in the refund posted  which is also a point of confusion for many. 

 

One day the programmers may  get this changed to more timely reflect the section you are working on as you work on it and not way in advance.  Users are not happy when they see the refund being reduced without a good explanation especially when the program says you can get $X as a credit and they see the refund either being reduced or not increased.

 

ccossibo
New Member

Why are the 2021 advance child tax credit payments reducing my refund, taking away the other half of the credit?

Thanks for thinking through this. What doesn’t make sense is that this year our income is lower, paid more in taxes (self employed), and had a higher itemized deduction. If the credit had not been increased we would have a tax bill rather than refund. 

It seems like the program isn’t taking something into account when calculating. 

Why are the 2021 advance child tax credit payments reducing my refund, taking away the other half of the credit?

@ccossibo Did you get the advance child tax credit payments between July and December?  If so, you already received some of your "refund" in advance.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
ccossibo
New Member

Why are the 2021 advance child tax credit payments reducing my refund, taking away the other half of the credit?

I did. But that should only be half of it. The other half should be a part of this return. 

Vanessa A
Expert Alumni

Why are the 2021 advance child tax credit payments reducing my refund, taking away the other half of the credit?

Are you still claiming the same number of children that you did last year on your tax return?  Are they 17 or younger?  Did something change in your situation?  If your dependents no longer qualify as a Qualifying Child then your refund would be reduced, as you may or may not have to pay back the amount you received depending on your MAGI for 2021. 

 

If the above does not apply and all of your children still qualify and you still qualify, then it is likely that the reduction you are still receiving the other half of the child tax credit, but the amount on your refund is dropping by the amount you entered as already received.  

 

You can look at the amount you are receiving this year by clicking on Tax Tools>>Tools>>View Tax Summary>>>Preview My 1040 then scroll down to look at line 28.  

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Why are the 2021 advance child tax credit payments reducing my refund, taking away the other half of the credit?

The IRS is sending out letter 6419 to you.  It will show the amount of advance child tax credit that you received during 2021.  Enter the information from that letter carefully.   The remaining amount of CTC that you can receive will show up on line 28 of your 2021 Form 1040.

 

PREVIEW 1040

 

https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing

Click on Tax Tools on the left side of the screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

 

 

NOTE:   The CTC is indeed a “credit” that can be applied toward any tax liability that you would otherwise have to pay as “tax due”  to the IRS.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

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