@Joepeka wrote:
Perhaps I am totally misunderstanding the handling of the 2021 child tax credit. We have two children, both under age 6 and received the advance payments in 2021 (July-December) for a total of $3600. When entering all our data into TurboTax Deluxe (desktop version), once we entered the $1800/child advance credit, our refund dropped by $3600. Our AGI is about $7000 more than 2020 but is still well under the $150,000 phase out level for the credit. Is this some calculation error in TurboTax or am I totally misunderstanding the credit? In looking at the 1040 form in TT, the remaining $3600 credit is showing but I'm struggling to understand why our tax liability appears to have gone up $3600 due to the advance payments in 2021.
Before you entered the advance child tax credit you received in 2021 your Total Child Tax Credit of $7,200 was entered on your tax return and was reflected in your Federal Tax Refund. After you entered the $3,600 of the advanced child tax credit you received in 2021 the amount of the Child Tax Credit was reduced to $3,600 and reflected in your tax refund.
The Child Tax Credit is entered on your federal tax return Form 1040 on Line 28. It is added to your other tax payments, it is not a separate refund. Your Total taxes from Line 24 are subtracted from your Total tax payments on Line 33. If you have an overpayment then that is entered on Line 34 as your federal tax refund.
You can view your Form 1040 at any time using the online editions. Click on Tax Tools on the left side of the online program screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.
