New twin dependents

[DMoos1]

We have two children 7 and 4 years. We just received our child dependent care credit of $550 on July 15. We owed around $700 federally last year in taxes.  We just gave birth to twins in June of 2021 and did not claim them yet on the federal IRS website. I am on maternity leave this year so subsequently will have  reduced income. What can i expect as a return if i do not claim the twins. If I do claim all 4 children what will be my monthly child credit payment be. I do not want to owe taxes at the end of the year.

[NateTheGrEAt · Accepted solution]

Hi DMoos1,

Congrats on the new additions!

If you input the twins on the IRS website you could expect $300 per month for each of them, so $600 per month more. If you don't add them, then that $600 per month times 6 months ($3600 total) would be a credit on your 2021 tax return. Keep in mind that the total CTC amounts have also increased this year. Last year, the two older children would have qualified you for $4000 total credit ($2000 each). This year, they qualify for $3000 for the 7 year old and $3600 for the 4 year old, or $6600 total. Of that $6600 you are getting $550 per month for 6 months in advance, or $3300. The other $3300 is claimed when you file taxes. 

So if you do input the twins your child tax credit would be $1150 per month now and $6900 total when filing ($3300 for the older kids and $3600 for the twins). If you don't input them, your credit will continue to be $550 per month and you would claim $10,500 ($7200 for twins plus $3300 for 7 and 4 year old) when filing. 

Either way you'll have a significantly larger CTC than the $4000 you received last year, and that combined with your decreased income would make me think you're unlikely to owe taxes absent any other major changes to your finances.

I hope this information is helpful!