Child Tax Credit Doesn't Seem to be Applied Correctly

[davidwood78]

I'm divorced with 3 children. Last year, per our agreement, I claimed two kids, which means I received $3,000 in advance payments.  This year, I am only claiming one child.  Not only am I not getting my extra $1500, but, somehow, I have to repay the $3000. I don't understand.  If I claim 2, my tax gets reduced to 0.  Shouldn't I still get $3000?  That was the deal, half now, half later.  Where's my other half?

[DawnC]

The Advance payments were for tax year 2021.   Since you are only claiming one child on your 2021, the maximum child tax credit you can take is:

$3,000 for a child aged 6-16 or 

$3600 for a child under 6.

If your Adjusted Gross Income (AGI) is over these amounts:

• $150,000 if you're Married Filing Jointly or a Qualifying Widow
• $112,500 if you're filing as Head of Household, or
• $75,000 if you're Married Filing Separately or Single

the amount of Child Tax Credit you're eligible for is reduced ("phased out") by $50 for each $1,000 your modified AGI is above the income threshold.    You’ll still qualify to receive $2,000 per child until your modified AGI in 2021 exceeds

• $400,000 if married and filing a joint return; or
• $200,000 for all other filing statuses

To qualify, your child must meet all of the requirements found here.    Make sure you have gone through the dependent section and answered all of the questions correctly and that your dependent is listed on Form 1040 as eligible for the Child Tax Credit (checkmark in Column 4), see below.

Make sure that you entered the amount from your 6419 letter; don't include amounts from the other parent's letter if that parent is not on your tax return.  

As a result of types of  family and life changes (only claiming one dependent instead of the 2 you previously claimed), you may have received a total amount of advance Child Tax Credit payments that exceeds the amount of Child Tax Credit that you  are allowed on your 2021 tax return.    You qualify for full repayment protection and won’t need to repay any excess amount of your advance Child Tax Credit payments if your main home was in the United States for more than half of 2021 and your modified adjusted gross income (AGI) for 2021 is at or below the following amount based on the filing status on your 2021 tax return:

• $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 are married and filing a separate return.

Your repayment protection may be limited if your modified AGI exceeds these amounts or your main home was not in the United States for more than half of 2021.   This is when you may need to repay some of the advance payments.   For more detailed information, please see 2021 Child Tax Credit and Advance Child Tax Credit Payments — Topic H: Reconciling Your Advance Chil... on Your 2021 Tax Return

[nitsuj17]

I can confirm this is a bug in turbotax deluxe download.

I have 2 children 6-17 so deduction should be $6K (married filing jointly, under $150k agi).

Prepaid $1500 per kid through monthly payments.

Turbotax says I should have a 4K deduction total (1k after prepayments) AND isn't calculating the $500 credit for an elderly parent living with us like we have done the past several years. Clicking on the link for explanation at the credit it still lists the 2020 information (2000 per child).

Reddit has several posts about this as well. Its a turbotax bug.

[DoninGA]

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@nitsuj17 wrote:

I can confirm this is a bug in turbotax deluxe download.

I have 2 children 6-17 so deduction should be $6K (married filing jointly, under $150k agi).

Prepaid $1500 per kid through monthly payments.

Turbotax says I should have a 4K deduction total (1k after prepayments) AND isn't calculating the $500 credit for an elderly parent living with us like we have done the past several years. Clicking on the link for explanation at the credit it still lists the 2020 information (2000 per child).

Reddit has several posts about this as well. Its a turbotax bug.

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Have you updated your software to the latest release?  Click on Online at the top of the desktop program screen.  Click on Check for Updates.

If you are running Windows the current TurboTax version is 021.000.0415.  Click on Help at the top of the desktop program screen.  Click on About TurboTax.  Click on the Version tab.

[AmeliesUncle]

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@davidwood78 wrote:

I received $3,000 in advance payments.  This year, I am only claiming one child.

.  Where's my other half?

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What other half?  One child results in a $3,000 credit.  You already received $3000 in Advance credit.  So there is no further credit added to the tax return.