Having Problems with Child Tax Credit

[DoninGA]

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@krestep wrote:

Exactly the same issue.  Also 3 kids, but one is under 6, so my credit should be 9600.  When I subtract out the 4800 I received in advanced, it's counting that as money I owe.  Basically double subtracting the 4800.  Same issue on H&R block.  I've been with intuit/turbo for a long time and don't want to switch, but they need to fix this.

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No it is not counting it as money you owe.  The $4,800 advance child tax credit you received is deducted from your Total Child Tax Credit on the 2021 tax return which is $9,600.  The remaining refundable Child Tax Credit is entered on your federal tax return Form 1040 Line 28.  The credit is included in your federal tax refund or it will reduce the amount of taxes owed.

Look at Line 34 for the tax refund

Look at Line 37 for the taxes owed

Look at your tax return Form 1040 and follow the Lines and the calculations -

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

[VolvoGirl]

@DoninGA  That's got to be the best explanation I've seen.  It's very hard to explain it to people.  And most of the time they never understand.  Especially since it's usually half so the same amount is on line 28 and they see their refund change by it.

[NettyO8]

I’m having the same exact issue and don’t know if I should file or not. These other people don’t understand and think we don’t know that we already received half of the child credit but we should be getting the other half and it’s not showing up. Very frustrating 

[xmasbaby0]

@NettyO8 Please look on line 28 of your tax return and then follow the math down to your refund.  The "second half" of your CTC is on line 28.   We know it is confusing but that is how it works.   If you have an amount on line 28 you ARE getting the rest of the CTC.

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.

[DoninGA]

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@NettyO8 wrote:

I’m having the same exact issue and don’t know if I should file or not. These other people don’t understand and think we don’t know that we already received half of the child credit but we should be getting the other half and it’s not showing up. Very frustrating 

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The other half is on your federal tax return, Form 1040 Line 28 as a refundable child tax credit.  That amount is included in your federal tax refund or it has reduced the amount of federal taxes owed.  It will be entered on the Form 1040 Line 28 regardless of which tax preparation software you use.

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

Have you looked at your tax return?

[krestep]

I appreciate you posting this.  It further highlights the problem.  "The other half is on your federal tax return..."

The problem is, only half is on there.  Then later, it subtracts the half that we already got.  Then when you go into the tool you just mentioned, there is nothing in the credit line because it canceled itself out.  This is exactly what everyone in this thread is pointing out.  You are correct that if I just do my taxes myself, this won't be a problem.  We're just trying to let intuit know that their software is calculating incorrectly. 

[DoninGA]

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@krestep wrote:

I appreciate you posting this.  It further highlights the problem.  "The other half is on your federal tax return..."

The problem is, only half is on there.  Then later, it subtracts the half that we already got.  Then when you go into the tool you just mentioned, there is nothing in the credit line because it canceled itself out.  This is exactly what everyone in this thread is pointing out.  You are correct that if I just do my taxes myself, this won't be a problem.  We're just trying to let intuit know that their software is calculating incorrectly. 

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If there is not an amount shown on Line 28 for the child tax credit -

Did you receive the advance child tax credit in 2021?  If so, did you enter the same amount received for both you and your spouse?  In other words if the Total amount of advance credit received was, for example $1,500, did you enter $1,500 for you and $1,500 for your spouse?  If that is what you did then it would eliminate all the child tax credit on your tax return and Line 28 would not have any amount entered.  You would have to go back to the Child and Other Dependent Tax Credit section and change the amount received to $750 for you and $750 for your spouse. 

These are screenshots for Schedule 8812 in the TurboTax program where one dependent age 10 is being claimed on the tax return -

When no advance child tax credit was received, the full amount of the child tax credit is entered on Schedule 8812 and that amount flows to Form 1040 Line 28 -

When the advance child tax credit was received and reported, then half the amount of the child tax credit is entered on Schedule 8812 and that amount flows to Form 1040 Line 28 -

And this screenshot of the Form 1040 Line 28 for the amount of child tax credit from Schedule 8812 -

All the above was taken from a 2021 TurboTax Premier edition program using the exact same software as all other 2021 TurboTax editions.

[allibaba6]

I have no idea if I'm replying on the correct thread but here's my issue. 

When comparing last year and this year it's telling me last year I owed $526 in Federal taxes and this year $5695! The only thing that changed is our income dropped $5000. Why is this? Is this why my $4500 isn't being refunded?

[xmasbaby0]

@allibaba6 We cannot see your screen, your return or your account.  Have you entered ALL of your 2021 information?  All your income, etc.?  Many tax documents that you need do not arrive until late January or even February, so maybe you do not have it all there yet.

No one in this user forum can see your tax return or your screen.  There were major tax law changes that began with the 2018 tax year that seem to continue to surprise some people.  Personal exemptions of over $4000 per person were removed beginning with 2018 returns.

 Was something different for 2021?  Did you have less income due to the pandemic?  Did you receive unemployment compensation?  If so, did you have tax withheld from it?

There are a lot of variables that affect your refund or tax due including how much you earned, how much tax you had withheld, your filing status, the number of dependents you claim, your deductions and credits, etc.  You may have lost Earned Income Credit or the Child Tax Credit— did a child turn 18?  If you received the EIC last year, remember that changes in the amount you earn have a big effect on the amount of EIC you can get. (Sometimes earning more money means less EIC)  Are you 65 or older ?  If so, your standard deduction is higher. Everyone has a higher standard deduction now so it is harder to use itemized deductions.

And of course, always check your own data entries, looking for errors such as misplaced decimals or extra zeros.

https://ttlc.intuit.com/questions/1901008-why-did-my-refund-go-down-compared-to-last-year-s

Print out 2020  and 2021 and compare them side by side to see what is different. 

https://www.postbulletin.com/news/business/tax-preparers-warn-your-refund-may-be-smaller-than-usual/...

[morangegurl]

Okay, so here's the conclusion that I've come to is: we were misinformed lied to about how the prepayments were going to work and that they weren't going to look or work the same way on our taxes as in previous years. Honestly, everyone should have opted out of the advanced payments and if I had realized how it was going to impact our taxes I would have.

This article was published in July of 2021 and if I had read it then I would have opted out of the prepayments right away:
https://www.kiplinger.com/taxes/603223/will-monthly-child-tax-credit-payments-lower-your-tax-refund-...

So in previous years the Child Tax Credit was a nonrefundable credit. This year since it was a fully refundable credit, and most of us got half of it up front, the half we got up front doesn't affect our taxes (they can't refund what we've already been paid), we were given the cash and that's it. So this year none of my tax liability was reduced, and only the second half of the money which I am owed is showing up (as it should) as a refundable tax credit on line 28 & 32 it is then added to the taxes I paid through my employer throughout the year and other tax credits I qualify for and all together they don't cover my tax liability. This has never happened to me before because the taxes I paid and the CTC usually reduce it enough that with my deductions I typically get a refund.

Turbo Tax isn't wrong.

WE WERE LIED TO AND I'M PISSED ABOUT IT AND YOU SHOULD BE TOO!

Also to all the people asking if we entered our information correctly, the answer is YES, but the results are not what we are expecting, that's why we're here commenting on this thread.

[Charles_52]

Same issue with me

[Srtech]

Same issue. I have same tax like last year. Remember there is  no change in tax liability.  Just child credit is changing this year. I received 4k last year for 2 kids. So this year I expect other half of 6k to show in 1040 total refund. But TurboTax or generated preview form doesn't show other half. Added 2 dependants correctly and mentioned that i received half of  advance child credit payments. So seriously some issue. Not sure do I need to wait or irs will calculate correctly and send other half of credit.  Any advice?

[RaifH]

There are a couple of possibilities why you are not getting the Child Tax Credit that you expect. One possibility is that your combined income is too high to receive the full Child Tax Credit. The thresholds are as follows:

• $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 applies to you.

Another possibility may be that one of your children is not entered into the system correctly, and is therefore not triggering the Child Tax Credit. For each child in the Add a Dependent screens: 

1. Ensure that every child is marked for having lived with you for 6 months or more and that all that time was in the U.S.
2. Mark No to Did your child pay for more than half of their living expenses and other support?
3. When you enter your child's Social Security number, ensure that the box marked "Not valid for employment" is printed on your child's Social Security card is not checked.

Finally, you may want to check that the amount you received from July through December as advanced payments is entered correctly and matches what the IRS reported to you on Letter 6419.

1. In your TurboTax return search for Child Tax Credit and Continue.
2. Answer the question on the Let's start with where you spent the most time in 2021 screen and Continue.
3. On the Tell us about any advance Child Tax Credit payments screen, answer Yes, enter the amount from your letter in the Tell us about any advance Child Tax Credit payments box, and Continue.
   1. If your spouse also received payments, be sure to enter that amount as well as a combined total for both of you.
4. Answer the questions on the following screens, confirm your amount on the Let's recheck your advance Child Tax Credit payments screen, and Continue.

At this point, if you are eligible, you should be receiving the other $3,000 on your tax return. To verify this:

1. Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
2. With the Tax Tools menu open, you can then view your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu
3. Scroll down until you see Form 1040 Line 28 Refundable child tax credit. It should be $3,000. 

@Srtec

[xmasbaby0]

@Srtech Sometimes users are simply confused about where to look for the "second half" of the child tax credit.   Look on line 28 of your Form 1040.    That is where it will be, then it is added to your refund.   Your refund will be on line 35a.

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.

[Srtech]

Thanks for clarification. I see the child credit at line 28 as $3300. But please look at my 1040 preview below here for 2021.  Last year(2019) tax at line 24 was around $5000, because it deducted $4000 child credit from tax, which was same 9k.  So I was expecting this year also, it should deduct $3300 from my tax so It will show that in final refund in 35a.

Is this how it will be calculated this year, just curious to know ?