Child Tax Credit Error?

[Brian_F]

Hi Everyone,

I have 2 dependents (one 4 year old, and one 7 year old) that fully qualify for the Child Tax Credit, and previously received $2,150 in advanced payments.

When completing this section in TurboTax, it's showing a $1,850 credit after entering everything.

This would equate to a $4,000 total credit (the 2020 value), however I thought this was increased for 2021 (to $6,600 for a 4 and 7 year old).

Has anyone else had this issue?  Or am I misreading something?

Thanks,

[KrisD15 · Accepted solution]

It may be limited based on your income. 

According to the IRS:

The Child Tax Credit begins to be reduced to $2,000 per child if your modified AGI in 2021 exceeds:

• $150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
• $112,500 if filing as head of household; or
• $75,000 if you are a single filer or are married and filing a separate return.

The first phaseout reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you.

IRS Link 

[sbbekkuntz]

I'm having the same issue this year.  And my income is within the limits to not be reduced.

[JamesG1]

Review the Child Tax Credit on line 28 of the 2021 Federal 1040 tax return and on line 12 of Federal Schedule 8812.

View the computation of the Child Tax Credit on line 12 of Federal Schedule 8812.  You are able to view the entire 2021 1040 Federal tax return at Tax Tools / Print Center.

If the software did not compute the correct credit amount, review the dependents at My Info.  Dependents need to be qualifying dependents to qualify for the Child Tax Credit.

Tests to be a Qualifying Child 

1. The child must be your son, daughter, stepchild, foster child, brother, sister, half- brother, half- sister, stepbrother, stepsister, or a descendant of any of them.
2. The child must be (a) under age 19 at the end of the year and younger than you (or your spouse if filing jointly), (b) under age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly), or (c) any age if permanently and totally disabled.
3. The child must have lived with you for more than half of the year. 
4. The child must not have provided more than half of his or her own support for the year.
5. The child must not be filing a joint return for the year (unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid).  

You enter the Advance Child Tax Credit payment amounts at the screen Tell us about any Advance Child Tax Credits.  Make sure that you enter the correct amount received.  Line 28 of the Federal 1040 reports the refundable amount after netting the advance payments from the Child Tax Credit amount.

See also this TurboTax Help.

[TJoe]

I'm using the desktop version of Turbo Tax 2021. I've entered my four children/dependents, one of which was born in August. However, when I look at line 19 on my 1040, I'm seeing a total of $6,000 ($2,000/dependent). For some reason, it's not calculating the addition of my child born this year which I'm guessing because they didn't technically live with me the entire year, since they were born in August. However, when talking to a CPA, I should be getting the full credit as long as he was born in 2021. This has been an issue in the past too, not sure why. 

Also, based on the child tax credit for 2021 I would expect the credit to be $13,800 (3 under 6 and one 6). I've received $5,100 in ACTC. 

Any insight would be greatly appreciated. 

[NCperson]

@TJoe - most common error: when TT asks how long the newborn lived with you in 2021, you must answer "the whole year", even if the child was born on 12/31/21!!!!

check whether taht fixes the problem  and post back! 

[xmasbaby0]

@TJoe

Make sure you have entered your child as a dependent in My Info, and that you have entered the child's Social Security number.    Careful— do not say that your child’s SSN is not valid for employment.  If your child was born in 2021make sure you said he lived with you the whole year.  There is an oddly worded question that asks if the child paid over half their own support.  Say NO to that question.