Advanced Child Tax Credit Payments (ACTC)

[ASlee]

I went to IRS Portal and declined ACTC payments but received them anyway. We aren't claiming our granddaughter in 2021due to her returning to her mother. However, I received them so sent them back per instructions in Topic O: Returning a Payment. Now I've received IRS Letter 6419 that shows I received payments but no mention of my returning them. Where should I put that information? Turbo Tax forces me to payback a second time by lowering my return amount.

[ThomasM125]

Since you didn't effectively receive the payments, you should not enter them on your tax return. Once you file your return, however, you may be charged for the missing payments, as they may have not been matched to your account by the time the return is processed. If this happens, you will receive a letter demanding additional tax or it will be subtracted from your refund. In either case, you will receive a letter explaining what happened and you can respond to the letter requesting the IRS adjust their records to reflect the missing payments.

[ASlee]

Thanks for your prompt response. As I'm sure you know the place in TurboTax where IRS Letter 6419 information is entered is the Worksheet on Schedule 8812, Line B1 and B2. Those lines also allow Supporting Statements where I can enter the amounts from the Letter 6419 and then zero them out stating that I had returned the payments. This, of course, results in a net $0 showing on the Worksheet. Are Supporting Statements sent to IRS with my return when I electronically file?

[DianeW777]

It may be too early to know if a statement like you refer to would go with the tax return.  There are specific statements that are required to go with a tax return and those, for the most part, would be included with an e-file return.  You should keep your documents such as proof of repayment and the IRS letter 6419 for protection should you need them later.

[ASlee · Accepted solution]

Thanks for your input. I have found a spot on Schedule 3 to show repayment of AdvCTC payments. Using 1040/1040SR Worksheet, information is entered on "Other Credits and Payments Smart Worksheet" Line H.  It then is transferred to Schedule 3, Line 13z, and Form 1040, Line 31/32. This counter balances what went on Schedule 8812 and received via Letter 6419. Any "red flag" raised by having different amounts on Schedule 8812 and Letter 6419 is eliminated. This was my objective. Supporting Documents for Schedule 3 and Form 1040 hopefully will answer all IRS questions that will arise when e-filing. 

[Hal_Al]

If others reading this, be advised that the "Smart worksheets" described by @ASlee  are only available in the desktop/download/CD versions of TurboTax. If you are using TurboTax online (TTO), this option is not available. 

[bobby42]

i opted out of the monthly payments on the irs website. i wanted the full credit at the end of the year. I claimed the kids on my 2020 taxes because i knew my ex wife would claim the kids in 2021 season. On my tax forms i said i received the $4200 but I did not. So now my ex -wife’s refund is still processing after 21 days. On my tax forms it does say i received the $4200 credit. i’m concerned. I thought turbo tax would automatically give me the credit if i said i didn’t get the monthly payments. 

[bobby42]

 Turbotax would’ve automatically given me the credit if i said i didn’t receive any advance child tax credit payments. So with that being said intentionally said i got the payments even though i filed to opt out of monthly payments. My ex- wife claimed the kids this year because i claimed the kids in 2020. My wife claimed she didnt receive any advance child tax credit monthly payments. so she would get the full $4200 credit. Should i be concerned or will the irs match the kids SSN’s and see i opted out of payments?

[VolvoGirl]

No Turbo Tax would not have given you the credit on your 2021 return if you aren't claiming the kids.  It is really based on 2021.   You don't get it at all for 2021.  But if you said you got the advance payments it might have made you pay it back since you aren't claiming them.   I don't know exactly how that works.  @Critter-3 

[Hal_Al]

Advance CTC repayment protection  https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-t...

[rjs]

@bobby42  You seem to be mixing up the Child Tax Credit and the Recovery Rebate Credit. They are two completely different credits. The $4,200 amount looks like the Recovery Rebate Credit, $1,400 per person for 3 people, not the Child Tax Credit. The maximum Child Tax Credit is $3,000 for each child age 6 through 17 at the end of 2021, or $3,600 for each child age 5 and under.

The advance payment of the Recovery Rebate Credit was called an Economic Impact Payment (EIP) or stimulus payment. It was paid in a single lump sum in most cases, and there was no way to opt out.

The monthly payments that you opted out of were for the Child Tax Credit, not the Recovery Rebate Credit.

You need to be clear about which credit you are looking at. You have to tell TurboTax how much you received in advance for each credit separately. The calculation of both credits is based on your 2021 tax return, but the advance payments were based on your 2020 tax return, or possibly even 2019.

Do not, under any circumstances, tell TurboTax that you received a payment that you did not actually receive. Enter only the payments that you actually received, if any, for each of the two credits.

[bobby42]

I’m Speaking of the 6419. I opted out of the payments. I tried to file saying i didn’t receive the payments but since i claimed my kids on 2020 tax return turbotax kept insisting that i qualified for the full amount for child tax credit  and kept trying to apply it to my return.Knowing my ex wife was claiming the kids i’m not going to get her i trouble. so i said  i got the advance payments. even though i didn’t receive any monthly payments. IRS will run the kids social security numbers and surely see i opted out of the monthly payments so my ex will be able to get the full credit instead of partial credit.

[VolvoGirl]

If it tried to give you the Child Tax Credit then are you sure you deleted and removed the kids off of your return?   Go back to My Info and make sure they are completely gone.   

[bobby42]

i actually did do that. still kept tying to give me the credit 

[bobby42]

i completely erased the kids. Didn’t matter. I ran into a similar problem when filing in 2019. I actually called (the enemy) H&R block and asked the tax specialist about a credit that i didn’t want. She informed me to say i received the credit even though i didn’t. My ex-wanted to claim the credit and she was  correct and it all worked itself out . IRS will cross reference social security numbers and see everything. I remember saying “no way i’m not lying on my return!” she said “ok then don’t lie and get the money. then you’ll really be in trouble when your ex claims the kids” she was 100% right.