Child Tax Credit not calculating correctly

[davidk99]

https://www.kiplinger.com/taxes/602334/2021-child-tax-credit-calculator

Big changes were made to the 2021 child tax credit by the American Rescue Plan Act, which President Biden signed into law in March. The two most significant changes impact the credit amount and how parents receive the credit. First, the new law temporarily increases the credit amount from $2,000-per-child to $3,000-per-child ($3,600 for children 5 years old and younger) for the 2021 tax year. Second, it authorizes advance payments to eligible families from July to December. Half the total credit amount will be paid in advance with the monthly payments this year, while the other half will be claimed on the tax return you'll file next year.

Forgive me but this type of info confuses me ESPECIALLY when the Turbo gave me the note that I am supposed to get $3000 

[davidk99]

Line 28 says $1500... why do I read everywhere that the credit for 2021 was increased to $3000 and we got half in advance. That means that I should get another $1500 and I expected on the tax refund

[xmasbaby0]

@davidk99 That $1500 you see on line 28 is your "second half" of the $3000.    You are not going to see the number $3000 on your Form 1040.  You already received $1500.    Now you get another $1500.

The remaining amount of CTC that you can receive will show up on line 28 of your 2021 Form 1040.   Then it will calculate down to the refund you see on line 35a or the tax due on line 37.

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.

[Vanessa A]

The credit for 2021 was increased to $3,000 for kids ages 6-17.  When the IRS sent out the advanced payments, they deducted this from the $3,000 that you would get for the year.  That is what the Advanced payments are.  If you would get $3,000 on your return now plus the $1,500 you already received, you would have received a total of $4,500 instead of $3,000.

There was an option to go to the IRS portal and change your Advanced Payments. However, many people did not know this option was available or did not understand what it meant for their 2021 refund when they filed their return so they continued with the advanced payments.

[JumpinJohnny31]

@xmasbaby0 

Sorry I still not get it. Let me try another way. I went back and changed my answer to having received any Advanced Child Tax payments to "No". And with my AGI, it now updates and shows very correctly on line 28 that I should have a reduction of $4000 ($2000 x 2 children). My Federal Tax Due is then also reduced by exactly $2000 coming more in to line what it generally should be/as planned closer to zero owed!

If I go back again, and re-enter that "yes" I did receive Advance Payments of $2000 total, and now line 28 now shows $2000 and my Federal Tax Due is now +$2000 higher. This makes no sense.  So being penalized for receiving a payment. Government gives me $2000 cash + and then basically then reduces the amount of child reduction by $2000, which in turn means I have to pay back the $2000 they gave me, since now somehow I owe $2000 more in taxes. So how exactly did that help?

[xmasbaby0]

@JumpinJohnny31 You need to have a real-time conversation with someone who can talk you through it.

To call TurboTax customer support

https://ttlc.intuit.com/questions/1899263-what-is-the-turbotax-phone-number

Customer support is available from 5 a.m. to 9 p.m. Pacific time daily

[JumpinJohnny31]

Ok, thank you.

[davidk99]

Thank you. I think I understand now. They paid me something that looked like it's mine but they actually want it back. If I did not take those payments my refund would have been $1500 more.

You are right. I had no clue what they were doing and what's the implication.

[VolvoGirl]

@davidk99   You already got the 1500 as an advance.  You are not paying it back.   And you get the remaining half 1,500 as a credit on line 28.   So 1500 Advance + 1500 credit on line 28 = 3,000.   You are getting the full 3,000.  They are not taking it back.  

I guess what confuses people is that the same amount shows up on line 28 and they think it's the half they already got and that they are missing the other half.  But the part you already got does not show up anywhere on your tax return.   You are not paying it back and not paying tax on it.

[davidk99]

Thank you. I think I finally understand. I simulated the situation as if I did not get anything early and my return would have been $1500 more. So that's what I kind of incorrectly called "paying it back." Basically the only thing that has changed is that we got the money earlier than we would normally which would be on the tax return. 

If you hated taxes and doing tax return as I do you would understand why this is such a problem for me. 😀

[Wefixcomputers05]

I have the same exact problem

You owe money or not it does not calculate

[Wefixcomputers05]

I have the same problem

And my income did not exceed the limts

[Wefixcomputers05]

I have the exact problem

I hope they are of it and working on it

[DawnC]

If you income does not exceed the limits, your issue may be that the dependent children are not showing as dependents.    Preview your tax return and ensure the Child Tax Credit box is checked on the dependent column 4.   If they are not listed as dependents qualifying for the Child Tax Credit, review your dependent entries to ensure you answered everything correctly.   

Then look on Line 28 to see your Child Tax Credit included in your refund amount.   It will be your total child tax credit less what you already received in advance.   

If you are still having an issue with your Child Tax Credit, you might want to start a new thread, as this one appears to be resolved.  @Wefixcomputers05

[VolvoGirl]

See this Business article

Expanded child tax credit complicates filing season | Fox Business