I have 2 kids under 6. Married and file jointly. I feel like the tax credit isn't really being applied. We've had to pay in for taxes over the past 5 years or so. I'm curious to know what I may be doing wrong. Thanks!
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Look at your federal tax return Form 1040 on Lines 19 and 28. If there is an amount on Line 28 then you received the child tax credit which would be included in the federal tax refund or the credit decreased the amount of federal taxes owed.
Line 19, the basic credit, can't be more than the total tax you owe (line 24). In other words, the credit on line 19 can never reduce line 24 to less than zero. If line 24 is less than $4000 (for two kids both under age 17) then you just don't owe enough tax to get the full benefit. Your income is too low or your other deductions and credits are too high.
Line 28, the Additional Child Tax Credit, can add to your refund even if you don't owe tax, but it is based on income earned from working. So even if you owe tax from investments, unemployment insurance, or other things, the ACTC is only calculated from income earned from working. Also, if you are self-employed, income earned from working is not your gross income but your net after expenses. The maximum ACTC is $1600 per child.
If lines 19 and 28 are blank, and you don't have a form 8812 as part of your tax return, then something else went wrong, and we need more info. Do your children have valid US social security numbers, and did you enter their birthdates correctly?
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