Has anyone encountered the same issue with 2021 tax return by using Turbo tax this year?
Scenario: tax due = $ 200+ without enter any 2021 child credit payment total. tax due = $200 + total 2021 child credit payment received.
Question: The turbo tax tax due calculation tells that you have to pay back all the 2021 child credit payment. Is this a true statement? I can't find any IRS or government official document to support this calculation.
Ask: If you encounter the same situation, how can we ask Turbo tax to fix it's software calculation unless Turbo tax has official IRS instruction as part of clarification. Or if you know any formal IRS rules regarding this question would you please post a link of the doc?
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The program added the full CTC in the refund at the very beginning and then much later in the interview you are asked how much you already got of the credit so that amount is removed from the refund ... it is not being taxed however you cannot have the credit twice. This also happens with the third stimulus payment ... that amount is also included in the refund early in the program and is removed later when you indicate you already got it ... again no double dipping allowed. So what you are seeing in that Refund meter is correct. Review the actual form 1040 & 8812 to see this at work.
https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021 this is the latest 2021 IRS 972 publication I can find.
Then how is the 2021 child credit calculated now by give half advanced credit? If the advance payment is paid back to IRS, then would $3000 credit will be given? Or only $1500 that is 50% of $3000 child credit.
The TT program will compute the entire credit ($3000) and then reduce it by what you got in advance(-$1500). NOTHING is paid back you just don't get the full credit on the return AND the advance as well. The manner this is presented in the TT program interview flow is confusing at best but it does calculate it correctly.
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