Child Tax Credit versus Additional Child Tax Credit?

[rsevick]

I have 2 children and in 2020, Turbo Tax showed a Child Tax Credit of $4000 (I assume $2000 for each child).  But in 2021, Turbo Tax labeled this as "Additional Child Tax Credit" with $4500 (and Child Tax Credit of $0).  I don't know why the child tax credit is listed differently between 2020 and 2021 ?  Did I do something wrong in Turbo Tax H&B?  Ages of fully dependent children at the end of 2021 are 13 and 17.

Questions are:

- is this expected / normal for 2021?

- we received the Covid relief money in 2021 (3 or 4 times) ... how did that affect my taxes?  I did not receive a tax form for that money I received.  should I have received a tax form for that money I received?

Thanks, Rob

[xmasbaby0]

The amount of the child tax credit changed for tax year 2021.   Many people who claimed a child on a 2020 tax return received advance child tax credit payments between July and December 2021.   If you received those advance payments you should have received Letter 6419 from the IRS showing how much they paid to you for the advance payments.  If you opted out of the advance payments or just did not get them, then you can get the full amount on your 2021 tax return.

Unless your income was too high and your CTC phases out, the amount of CTC for children age 6 to 17 is $3000 per child.  You may have received half of that during 2021 between July and December.

Check your online account with the IRS to see what the IRS shows for your CTC payments if you are not sure or did not receive the letter.

https://www.irs.gov/payments/your-online-account

Federal>Deductions and Credits>You and Your Family>Child Tax Credit

The IRS is sending out letter 6419 to you.  It will show the amount of advance child tax credit that you received during 2021.  Enter the information from that letter carefully.   

The remaining amount of CTC that you can receive will show up on line 28 of your 2021 Form 1040.   Then it will calculate down to the refund you see on line 35a or the tax due on line 37.

PREVIEW 1040

https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing

Click on Tax Tools on the left side of the screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

NOTE:   The CTC is indeed a “credit” that can be applied toward any tax liability that you would otherwise have to pay as “tax due”  to the IRS.

You would also have letter 6475 that shows the amount of the 3rd EIP payments ("stimulus") that was sent to you--the $1400 per person payments that were sent sometime between mid-March and the end of 2021.

Do not confuse these letters or the places in the software to enter them.   You enter information about the EIP payments in Federal Review for the recovery rebate credit.

[Cynthiad66]

No. you did nothing wrong.  Child Tax Credits are reported different for 2021.

Yes you should have received letters verifying the amounts received as Stimulus and Advanced Child Tax Credit.

Your children are of the ages to receive the full Child Tax Credit as follows:  It has gone from $2,000 per child in 2020 to $3,600 for each child under age 6. For each child ages 6 to 16, it's increased from $2,000 to $3,000. It also now makes 17-year-olds eligible for the $3,000 credit..

The Child Tax Credit is listed differently for 2021 because of changes based on the American Rescue Plan that allowed Advanced Child Tax Credits that started in July 2021.  If you received monthly payments for each child between July and December, this reduces the child tax credit on the return.

If you can't claim the full Child Tax Credit because you owe less tax than the available credit, you may be able to claim the refundable Additional Child Tax Credit.  Link for Additional Child Tax Credit:  Additional Child Tax Credit

IRS is sending out letters for both the Stimulus payments and the Advanced Child Tax Credit.  Caution if you have a joint return the amounts will be split for husband and wife. Also, some Stimulus letters are just now being received.  You can also log into IRS to get the numbers needed to complete your return.

Use this link to check Advanced Child Tax Credit:  Child Tax Credit Portal

How to check your amounts of Stimulus received:  Check Stimulus Payments