Child Tax Credit (6419)?

[jdkluck]

So I had a question, I am just starting to do my taxes and have a refund as of right now. But when I get to the deductions for child and other dependent tax credit. Once I enter in the amount of advance payments for my wife and I ($1800 for her and I) for advance payments. But as soon as I do that it takes $3600 off the refund. I am confused by that since I thought we would be getting the other 1/2 and be getting a refund/tax credit of $3600 to make up the total of $7200 for both my kids (4 years and 2 years old). We are filing joint and income is less than $150K AGI this year and last year.

So not sure what is going on or what I am doing wrong. Or maybe I just dont understand the child tax credit. Since I am getting less in deduction this year than last year ($4000). 

Any help or suggestions would be greatly appreciated.

[RobertB4444]

Your child tax credit is reduced by the amount that you already received.

The child tax credit was increased for 2021 to $3,600 for children under 6 and $3,000 for children between 6 and 17.  The IRS started sending this money out to families in July of last year - up to $300 a month for each child under 6 and $250 a month for each child between 6 and 17.  In January you should receive Letter 6419 from the IRS.  This letter will show all the advance child tax credit payments that the IRS sent to you.  When you are doing your taxes for 2021 you will enter in the amount that you received already and it will reduce the credit that you get on your return by that amount.  So, if you had one child under six and you received all your payments last year the credit of $3,600 on your return would be reduced to $1,800.  

In your case it sounds like you received $3600 and you should have the remaining $3600 showing as a deduction on line 19 or line 28.

[jdkluck]

You brought up a good point I did not even think about.

So are you saying that TurboTax automatically assumed that I did not get any advance child tax credit so when I get to that section and fill it out. It is just actually removing the part of the $7200 that I would get (which in this case is the $3600 we got from Jul-Dec in monthly payments)?

Some reason I just thought it did not even factor in any of those until you entered it. So I thought it was just taking away from my refund rather than just taking away from the full amount of the tax credit. But that would make total sense then and logic.

[KrisD15]

Yes, 

when you enter the dependents, and they make you eligible for the credit, that credit is taken.

When you report how much of the credit you already received, the amount of the credit showing as a refund (or as less tax due) is decreased. 

[VolvoGirl]

Yes, Turbo Tax started out giving you the full amount.  So your refund was high.  Then you enter what you already received so it subtracts out what you already got.   Check 1040 lines 19 and 28 and schedule 8812.