@decharaw
Maybe.
If your mother claimed a dependent on her 2020 Tax Year tax return, and received Advance Child Tax Credit Payments during 2021 for a child she cannot claim as a dependent in 2021, she will need to "Reconcile" for that on her 2021 Tax Year tax return.
It would not be a "Penalty" it may simply be repayment, meaning she would need to claim at least a portion of the payments as income. Therefor she may owe Federal Income Tax on that amount.
As "xmasbaby0" points out, there are requirements in place for a Taxpayer to claim someone as their dependent. You and your mother need to go through that list to decide who really has the right to claim the child. If the situation changed during 2021, you and your mother should have updated your tax situations on the IRS website.
Since 2021 is now (almost) over, and if the situation changed in 2021 regarding the child's dependency, you and your mother will both "reconcile" or "straighten it out" on your 2021 Tax Year return which is what we will be working on in 2022.
If you yourself are not a dependent, and your son IS your dependent, you most likely will receive the Child Tax Credit and your mother will most likely need to claim at least a portion of the payments she received as income.
Please click this link for more information about Reconciling Your Advance Child Tax Credit Payments
Please click this link for more information about claiming someone as a dependent
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
