My wife and I received $3k for advanced Child Tax payments, which increased Federal Tax Due in TurboTax? We further only received payment for 1 child, when we now have 2.

[cleverlyengaged]

TurboTax isn't asking if we have another child where we didn't earn advanced credit and why would advanced payment for the first child, increase our tax liability?

[xmasbaby0]

The software still needs to be updated for the child tax credit.   That is supposed to happen in early January.   When the software and forms are ready, you will be able to enter the amount of advance tax credit you received in 2021----and the IRS will be sending you a letter about that---- then you can reconcile the amount you should still receive for the qualifying children you are claiming as dependents on your 2021 return.   Give it a week or two and you will get the results you are not seeing yet.

[xmasbaby0]

Oh----and the PATH act means that you will not get a tax refund with child tax credit until the end of February at the earliest, so you do not have to be in a hurry to file your return.   Wait for all the forms to be ready.

[Critter-3]

Ok ... the new child will be entered in the MY INFO section and you MUST read the screens carefully ... the newborn lived with you ALL year when asked.

Next ... once you have entered in qualifying children in the MY INFO section the program automatically gives you the max CTC allowed  so the Refund-O-Meter will reflect that credit.   Then much later in the interview process you are asked how much CTC you got in advance ... and that amount reduces the full credit which is why the Refund-O-Meter shows a reduction to the bottom line.  So you did not lose a credit so much as the credit was adjusted for the amount you already got in advance.  Please review the form 8812 later to see how this works before you file the return.      This also happens with the advance stimulus payments as well ... the program gives you credit for all the people on the return and when you finally enter the amount you got in advance that amount reduces your refund naturally or increases your balance due.   Is this the best way to handle this news ???    Would it be better to NOT add it to the refund in the beginning and get your hopes up for a massive refund just to dash the dream later ???   Of course it would but the programmers and the powers that be don't seem to agree ... maybe they will change the flow in the future but don't count on  it.   Just remember the Refund-O-Meter is only correct when you have put in the last piece of information and have successfully  passed the Review Tab.