Child Tax Credit not calculating correctly

[ferreira-cami]

I've read through all of these posts and also similar messages. I think the only way to explain it is actually showing THE PROBLEM that Turbo Tax is having. I'll answer all the questions- we have two kids, we (unfortunately) received the Adv CTC for them early. So $1500 each. We make less than $150,000 married filed jointly so we should receive ANOTHER $1500 for each child. The screenshots that I'll attach here will actually describe the problem. I entered that we received the Adv CTC but you'll see that under 2021 "Child and Other Dependent Tax Credits" it shows "$0." It should show $3000 here to go against what we owe. I see the second half $3000 is listed in the "Additional Child Tax Credit" which is what we are getting now. Basically, what I'm seeing is a HUGE PENALTY for taking the Advanced CTC because now that $3000 is not posting against my total of what I owe. And in the end, we are actually LOSING that money because now we owe $2155 in taxes....which we have never owed in the Fed...because we get a child credit every year that posts against our total owed. You can see this in the difference in the total from last year to this year as an example. And no, TT did not automatically start me off with the full credit. Because if I back out the Adv CTC, it will end up giving me the full $6000 right there next to the "Child and Other Dependent Tax Credits." This is a major glitch and needs to be fixed ASAP.

[VolvoGirl]

Right.  It started out giving you the full 6,000 as soon as you entered your children.  Then at the end you enter the 3,000 advance you already got so it takes it out.  Line 28 is only the remaining amount you still get.  So mentally subtract the 3,000 you already got from the 2,155 tax due and you would have a 845 net refund.  

found this in a news article, it explains it pretty well........

While the CTC expansion was structured to not increase taxes on any household, a dollar of credit received in advance results in a dollar less received at filing time. For families unaware of the trade-off, it could mean a surprise when they see their refund total this year.

Consider a married couple with a 10-year-old child who normally received their $2,000 CTC when they filed their taxes. They would have received $1,500 of their $3,000 in advance. As such, they could potentially see their refund shrink by $500 even though their total benefit increased to $3,000 because they are left with $1,500 instead of their normal $2,000 at tax time.

[ferreira-cami]

Hi, VolvoGirl. I almost posted in my previous post that I would kindly ask you to not respond. I read all of your responses previously and you're not addressing the problem correctly. I'll either need to call and talk to someone or get a Token Key or whatever. My fear is that I have to go pay a CPA to do my taxes because of TT's problem. But I think, from reading through other posts, Turbo Tax is making a BIG MISTAKE and people are paying for the glitch in the system. Case in point, I'll show more pictures. I went back in and edited my return to prove the point that if I didn't receive the Advanced CTC, my return would show the proper $6000 credit, which posts against my tax Fed liability and now I am owed money. As you'll notice from the previous, there is still no accounting for the Advanced CTC in the TurboTax system. It should post in the "Child and Other Dependent Tax Credit" section. Please, again, don't tell me that it's magically there even though it shows as $0 because it's not. It's not there because it's not posting against my totals and puts me in the positive for owing on Fed. TT is going to have a big problem when thousands of people realize this problem and have to amend their returns and then are actually owed money by the government.

[DoninGA]

@ferreira-cami 

The tax code for tax year 2021 changed the Child Tax Credit from a nonrefundable tax credit to a refundable tax credit.

The credit is entered on Schedule 8812 on Line 14i.  This amount flows to the Form 1040 Line 28.

Look at your forms and schedules.  Click on Forms.

[ferreira-cami]

Posting on here is futile. I've already looked at the forms- it's not posting the accounting correctly. Something is wrong with TT.

[xmasbaby0]

@ferreira-cami If you owe tax it is for some other reason--like not having enough tax withheld from your paychecks.   You are not paying back the advance tax credit  nor is it being taken away from you.  You seem to be having trouble following the calculations.  You want to see $6000 on your Form 1040 and you are not going to see it.  You are only going to see the "second half" of the child tax credit---$3000--- and it will be on line 28.

Federal>Deductions and Credits>You and Your Family>Child Tax Credit

The IRS is sending out letter 6419 to you.  It will show the amount of advance child tax credit that you received during 2021.  Enter the information from that letter carefully.   

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.

[garajmahalic]

The issue is that by "giving" us $500 a month per child early we then do not get to deduct it on our return. I'm in the same boat as some here. I have 2 kids so there should be a credit of $6000 but I already got $3000 of it and that $3000 does not show up on the return, only the "remaining" $3000 does. Last year I got back $144, this year I have to pay $376. Had I not already received $3000 I would be getting back $2624 (3000-376). My taxable income was actually a little less than 2020 and my total tax owed was $355 less but, since I already received $3000 I now have to "pay back" $376.

Right after they started sending out the $500 a month payments I figured it would mean we would end up "owing". I didn't know I could have opted out. So instead of getting a nice return in April I got it from from June through December. I'm sure for a lot of people having the extra money each month was helpful but the IRS should have done a better job of explaining that it was going to make people's amount they would get back less than it would have been with no advance payments.