Having Problems with Child Tax Credit

[allibaba6]

I'm having the same problem and after reading many posts, folks aren't understanding.

I have 3 kids. The credit is FULLY refundable. My refund should START at $9000 and after I indicate that I've already received $4500 it should drop to $4500 as a refund. It's not doing that. The refund is starting at $4500 and dropping to $0 after I enter what I've received. There's for sure some sort of calculation error. It's frustrating!

[DoninGA]

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@allibaba6 wrote:

I'm having the same problem and after reading many posts, folks aren't understanding.

I have 3 kids. The credit is FULLY refundable. My refund should START at $9000 and after I indicate that I've already received $4500 it should drop to $4500 as a refund. It's not doing that. The refund is starting at $4500 and dropping to $0 after I enter what I've received. There's for sure some sort of calculation error. It's frustrating!

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Are all 3 children under the age of 18 in 2021?  Have verified the children's information, including Date of Birth, in the Personal Info section of the TurboTax Program?

What is your Adjusted Gross Income as shown on your 2021 federal tax return, Form 1040 Line 11?

What amount is shown on the 2021 federal tax return, Form 1040 Line 28?

[allibaba6]

Yes, all 3 qualify and I verified their information. Income is well under the $150,000 limit for a married couple filling jointly. The number on line 32 is $4500.

Regardless, since it's fully refundable, my refund should be a minimum of $4500. It's not even close.

[VolvoGirl]

But being refundable means it either adds to your refund or reduces a tax due.   You must be owing a larger tax due than the 4500 credit.  What is the total tax on line 24?  Then follow the math down all the lines.

[rjs]

@allibaba6  You don't necessarily get a refund of the $4,500. It's a credit that is applied against your tax for the year. The credit and your refund are two different things. Look at the actual tax form, not the refund "meter." If line 28 on your Form 1040 is $4,500 you are getting the full credit.

[DoninGA]

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@allibaba6 wrote:

Yes, all 3 qualify and I verified their information. Income is well under the $150,000 limit for a married couple filling jointly. The number on line 32 is $4500.

Regardless, since it's fully refundable, my refund should be a minimum of $4500. It's not even close.

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Since your other payments and refundable credits is $4,500 on Line 32 then does this include the Child Tax Credit on Line 28?  What is your Total Payments on Line 33?

Your tax refund is Line 33 minus Line 24.  What is your total tax liability on Line 24?

[allibaba6]

That's not the issue either. We don't owe. We're getting a refund, it's just not correct. We've never ever paid in since we've had kids. Loads of parents are in the same boat. 

[rjs]

@allibaba6 

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@allibaba6 wrote:

That's not the issue either. We don't owe. We're getting a refund, it's just not correct. We've never ever paid in since we've had kids. Loads of parents are in the same boat. 

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You never got advance payments of a credit before, either. The $4,500 of monthly payments that you received were an advance payment of your refund. So the refund that you get on your tax return is that much less. If your refund, before taking the advance payments into account, would be less than $4,500, then you have to pay back part of what you got in advance.

Again, don't look at your refund or tax due. That tells you nothing about the Child Tax Credit. Look at Form 1040 line 28. If Form 1040 line 28 is $4,500 you are getting the full Child Tax Credit. Look at the rest of Form 1040, after that, to see how your refund is calculated.

[allibaba6]

I've read through the forms.

According to IRS fact sheet Q A11: What does it mean to me if my child tax credit is FULLY refundable?

A11. It means you do not need any income or need to owe any tax in 2021 to receive the full amount of child tax credit for which you are eligible.

Q A10 states that it's fully refundable. Not that it reduces taxes owed. 

Read the IRS Fact Sheet for the child tax credit. That's where my info is coming from. 

[VolvoGirl]

Ok but let's set that aside for a minute.  Sounds like you still owe some tax on your income.  Like your withholding wasn't enough to cover the tax.  How much is on line 34 or 37?

Lets say you still owe $500 on your income (forgetting about the Child Tax Credit).  Do you want to get a refund for the full $4,500 and then need to send a check back in for the $500?

[rjs]

@allibaba6 

You are misreading the Fact Sheet. "Fully refundable" is a technical tax term. It does not mean that you get a refund of the full amount of the credit. It means that the credit does not get reduced if your tax on Form 1040 line 24 is less than the amount of the credit.

The Fact Sheet says you "receive the full amount of child tax credit." It does not say you receive a refund of the full amount. If Form 1040 line 28 is $4,500, you are receiving "the full amount of child tax credit." You have to look at Form 1040 line 28, not at your refund.

[Akasha]

I'm having the exact problem that she's talking about. My refund was saying 3000 something then i put that credit info in and it took away the 3000 instead of adding it. 

[xmasbaby0]

Stop watching the refund monitor and pay attention to line 28.  That is where you will see the rest of the CTC that you get.

The "refund monitor" starts off by giving your all of the stimulus money and all of the child tax credit because the software does not know yet that you received stimulus money or that you received some advance child tax credit payments.    That gets reconciled later.

That "refund monitor" changes as you enter information.      That is normal.   And you cannot take it seriously until you enter ALL of your information---even though it is so tempting to believe that the highest amount is the "right" refund.

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.

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.

[pse224]

I dont think you get what people are saying. When you get to the end and ready to submit nothing changes. 

[dmathes01]

The problem is turbo tax software is subtracting the child tax credit twice instead of once! I looked at my tax return last year and it's not calculating correctly because it's not putting the tax credit in the correct line (19).  Once they fix the software you will get the correct return.