Get your taxes done using TurboTax

Oh dear.....You have had a time.....So sorry for the loss of your spouse.   You have not mentioned how much your income is ----- it is possible that you will not have to pay back that child tax credit money that was sent to you.   Did they send you letter 6419 for the advance child tax credit payments?   The IRS sends that letter to the person who received the money.   Even though you gave it to the child's mother, the IRS does not sort out things like that.   They only look at who it was sent to-----you.   

See below:

TurboTax calculates the Repayment Protection.  This determines if a person is required to repay the advance CTC.

What is Repayment Protection?

Repayment protection is an income-based program that reduces the amount of excess advance Child Tax Credit payments you have to repay.

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. 

You are required to enter the amount you received as shown on that letter.   But if your income falls within the parameters of the payment protection, you will be okay and will not have to pay any of it back, even though you are not claiming the child on your 2021 tax return.

And....that will also be true for the stimulus payment.   If you received the $1400 for claiming the child and are not claiming that child on your 2021 return, you do not have to pay it back.   The fact that you also gave that money to the mother will not affect you.   Although.....if the child was in your care, you could have rightfully kept that money yourself for a foster child who could be claimed as your dependent.  Giving it to the mother was kind and generous of you, but was not required.

You did not ask about this----but just in case.....when you filed your 2020 tax return did you know that you could file a joint return even though your spouse had died in 2020?   If you did not file a joint 2020 return, you may need to amend and file joint.   The advantage of filing that way is that you would have a higher standard deduction for the 2020 tax year, and less of your 2020 income would be taxable.

And....you say you had the foster child for 16 months.....but which months?   Did the child actually live with you for more than six months of 2021?   Or not?   If the child was with you for more than half of 2021 you could claim the child on your own 2021 return.  Let's look at that.  

When you prepare your return, you will go here to enter the advance child tax credit payments that were sent to you:

Federal>Deductions and Credits>You and Your Family>Child Tax Credit

Post back with some information on how this comes out for you and whether the repayment protection has helped you.  And with when the child lived with you.