New Child Tax Credit

[ravik521]

Is my newborn child (in November) eligible for the (new) child tax credit that was recently signed into law? (The one that makes eligible citizens to receive $5,000.)

[LenaH]

Yes. Your newborn born in 2021 is entitled to stimulus funds, as well as the additional child tax credit if your income is within limits. Eligible individuals will receive an Economic Impact Payment for themselves and eligible dependents with an adjusted gross income (AGI) up to:

• $75,000 for individuals if filing as single or married filing separately
• $112,500 if filing as head of household and
• $150,000 if filing married filing jointly

An individual’s payment is reduced by 5% of the excess of the individual’s AGI over the applicable threshold.

Similarly, the Child Tax Credit begins to be reduced to $2,000 per child if your modified AGI in 2021 exceeds:

• $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.

If you qualify, please follow the steps below in TurboTax Online:

1. Open TurboTax online.
2. Under Personal Info, click Review/Edit.
3. Scroll down and click Add a Dependent.
4. Enter your child’s information in the screens that follow.
5. Continue through your return.
6. On the page titled, Your Tax Breaks, click Start next to Advance Payments, Child and Other Dependent Tax Credits.
7. Click Continue.
8. Answer Yes to the question Was your main home located in the U.S. for 6 or more months during 2021? (These months don't need to be consecutive.)
9. Follow the on-screen instructions.
10. Click Continue.

[ravik521]

Thank you, that helps.

However, for our second child, it doesn't appear to register as a qualified tax break. We are within the AGI, however in the tax form menu, our second child is checked as not a potential qualification for earned income credit.

Any suggestions?

[KrisD15 · Accepted solution]

If your child was born in November, go back through the "Personal Info" section and edit that child's information.

Make sure you are selecting 12 MONTHS, THE ENTIRE YEAR  (NOT JUST 2 MONTHS) for time living in your home. 

A child born during the year is treated as having lived in the home the entire year. 

(Unless there are uncommon circumstances to the contrary) 

[ravik521]

Thank you! That helps!