Deductions & credits

There are two different sets of interview questions concerning new payments you may have received from the IRS/Government in 2021.  

First, Advanced Child Tax Credit payments.  You would have received those payments monthly between Jul-Dec for each child that was claimed on your 2020 tax return.  You should receive a letter 6419 that shows those total payments. 

In the "Deductions & Credits" tab you will find the "Child Tax Credit" topic (it may be under the "Your Family" section).  You will be asked if you received advanced child tax credit payments.  You will enter the total amount you received according to your letter 6419.  If filing a joint return you will also enter the amount from your spouse's letter 6419 as well. 

At that point your total child tax credit based on your 2021 tax return information is calculated by subtracting the amount you entered from your letter 6419 (and spouse's if joint return) and then adding any remaining child tax credit to your tax return.  That remaining child tax credit shows up on line 28 as a refundable credit.

The second payment that you need to account for is the third stimulus payment (1400 per person on your 2020 return). As part of the federal review after entering all your income and deductions, you will be asked if you received the third stimulus.  If you answer "yes" you will be asked what the amount was.  You should get or have gotten a letter 6475 showing that payment as well.  At this point your refund or tax owed will be adjusted by removing the amount of stimulus payment that you indicate you (and your spouse if joint return) already received.

Any remaining stimulus amount that you are eligible for will be on line 30 of your return as a Recovery Rebate Credit.