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This is not a refundable credit, however if you qualify, and you were overpaid due to the advanced child tax credit (ACTC) issued from July - December, based on your 2020 return you may be eligible for Repayment Protection. Based on the IRS guidelines the following income levels could eliminate repayment that you received but were not entitled to.
TurboTax does the calculation automatically based on your entries and it is calculated on Form 8812, then carried to Form 1040, line 19.
Full repayment protection equals $2,000, multiplied by the following:
- The number of qualifying children that the IRS took into account when estimating your advance Child Tax Credit payments, minus
- The number of qualifying children you’re claiming on your 2021 tax return.
To be eligible for full repayment protection, your adjusted gross income (AGI) for the 2021 tax year must be at or below the following:
- $60,000 if you are married and filing a joint return or if filing as a qualifying widow or widower;
- $50,000 if you are filing as head of household; and
- $40,000 if you are a single filer or you are married and filing a separate return.
You won’t qualify for any repayment protection if your modified AGI is at or above the amounts listed below based on the filing status on your 2021 tax return.
- $120,000 if you are married and filing a joint return or if filing as a qualifying widow or widower;
- $100,000 if you are filing as head of household; and
- $80,000 if you are a single filer or are married and filing a separate return.
For information on the definition of modified AGI, see Topic C: Calculation of the 2021 Child Tax Credit
Example: Income is $30,000 in 2021, the taxpayer received $1,800 of ACTC for one child claimed on the 2020 return. The taxpayer no longer qualifies for the child tax credit because the other parent is claiming the child in 2021. The $1,800 would need to be repaid unless the taxpayer qualified for the Repayment Protection.
- When all the questions are answered under Deductions & Credits > Advanced Payments, Child and Other Dependent Care Credits; OR
- TurboTax CD/Download under Deductions & Credits > I'll choose what I work on > Child and Other Dependent Tax Credit, under You & Your Family
Answer the questions asked and you should see the images below if you qualify for the Repayment Protection in full. In this case the Form 1040, line 19 is zero.
