Why do I not qualify for the Child Tax Credit when my children meet all of the criteria and within TurboTax are listed as my dependents?

[craigwsnyder]

I simply get the message 'Because she had another disqualifying situation, Kaia doesn't count for the Child Tax Credit.'

[CatinaT1]

To qualify for the Child Tax Credit, your child must fit all of these requirements:

• Be under age 17 at the end of the tax year
• Is your son, daughter, stepchild, foster child, adopted child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them (for example, a grandchild, niece, or nephew)
• Has his or her own Social Security Number
• Lived with you for more than half the year
• Didn't support him/herself (i.e., didn't pay more than half their own expenses)
• Is a U.S. citizen, U.S. national, or U.S. resident alien

Additionally, you must have tax liability for the credit to be applied to.  If you do not, you may qualify for the Additional Child Tax Credit.

These links will provide more information:

Child Tax Credit

Additional Child Tax Credit

[craigwsnyder]

Hi. Thanks for the reply. My children do indeed meet all of those requirements, and I do have a tax liability. 

[JosephF8]

Sometimes that can happen if the dependent questions are not answered correctly

To fix this in TurboTax:

Open (continue) your return

Select My Info or Personal Info

Select Edit next to the name of the dependent in question.

If the dependent was born in 2019 make sure you select the entire year for time they lived with you .

Answer the other questions.

[Hal_Al · Accepted solution]

 There are 6 possible reasons; you aren’t getting the Child Tax credit (CTC). It’s usually #4; maybe #6 in your case:

1. You’ve entered something wrong. In the personal Info section, for the dependent, you must select answers that indicate that he/she is your dependent child. If the child was born during the year, say he/she lived with you all year (note: TurboTax changed how this section is done two years ago, you may need to go thru the interview again or even delete your dependent and start over). If the child was born in 2018, you have to answer that he lived with you all year. The CTC is not an automatic $2000, per child. It is income dependent. If you haven't entered your income yet, the CTC will not show.
2. Your child may be too old (over 16). You can still claim your child, as a dependent. What you can't claim is the Child tax credit. This comes as a big surprise to many parents the year their child turns 17. A child over age 16 no longer qualifies for the Child Tax credit (CTC). Although a child can still be a student dependent through age 23, and a qualifying child for EIC, the Child Tax Credit expires the year they turn 17 and you no longer get the $2000 CTC. Instead you will get the non-refundable (up to) $500 Other Dependent Credit.
3. Your income is too high. The Child Tax Credit (CTC) is phased out at higher incomes starting at $400,000 for joint filers ($200K single). You lose $50 for each $1000 (rounding up) your income is over that threshold. Previously it was $75,000 for single, head of household, and qualifying widow or widower filers; and $110,000 for joint filers.

4. Your income is too low. The child tax credit (CTC) is also limited to your tax liability. The CTC is a non-refundable credit and can only reduce your income tax to 0, It can not help you beyond eliminating your tax liability. But, if you have more than $2500 of earned income, some or all of it is usually given back to you thru the "Additional Child tax credit". That is, part of the CTC may be on line 18b of form 1040 (2019 version) instead of line 13a (lines 17 and 12 in 2018).   The  ACTC is calculated on form 8812 and  is basically 15% of your earned income over $2500. The ACTC is a maximum of $1400 per child (not $2000).
5. You are the custodial parent and the non-custodial parent is claiming the dependent this year. The CTC goes with the dependency, even though the custodial parent still gets the Earned Income Credit, Dependent care credit and Head of Household.
   6. Another possibility is that part of your tax due is not regular income tax, but is self-employment tax (FICA), early distribution penalty or another type of additional tax, for which the CTC cannot be used.

To get a 'second opinion' on-line direct from IRS, try https://www.irs.gov/uac/is-my-child-a-qualifying-child-for-the-child-tax-credit

TT FAQ https://ttlc.intuit.com/questions/2625810-why-didn-t-i-get-the-child-tax-credit-or-why-is-it-less-th...

[craigwsnyder]

Thank you. This was something within the software. When I went in and deleted each of them and added them back in, all was correct. (Note for anyone else: I also tried just going through the dependent interview, but that did not work).

Thanks much to all

[lifeisrosey]

After calling TurboTax customer service they wanted me to purchase the LIVE tax app but I told them this was something in their software but they wouldn't budge. After deleting the dependent and re-entering IT WORKED!!! I went from owing tax to getting a refund because of the CTC kicking in correctly. THANK YOU FOR THIS FORUM!!

[henrypg]

Thank you for this forum!!! This is definitely a bug in the software.

I was trying to amend my FY2018 return after noticing that only one of my two children received the child tax credit ($2,000). The other one received only the dependent care tax credit ($500). I tried multiple times to re-enter the information for each dependent. I am 100% certain that each had the exact same answers to all questions. No luck.

It only worked after deleting the two dependents and re-entering all information from scratch. Then my two dependents received the tax tax credit. I am recovering $1,500 from IRS!

[avinashm]

On Turbo Tax, there is a check box which asks "Is the Child SSN valid for employment?" I was answering No where as one should answer "Yes". This question does not mean if the child can start earning, it just asks if any restrictions on SSN. If your child is not a US Citizen then it might have restrictions. Once you check the box, it will only qualify your child for $500. If not checked it will qualify for full amount.

[michaelvu4]

why does Turbo tax still using the 2020 child tax credit ($2,000) instead of the 2021 rate of $3,000.  

[Vanessa A]

If TurboTax is using the $2,000 amount, you entered something that did not qualify for the $3,000.  The two primary reasons are:

• You earned more than $150,000 but less than $200,000 ($400,000 for married filing joint)
• You lived abroad in 2021 for half the year or more

[michaelvu4]

But neither of those are true.  My income is 299k but I'm filing jointly, and I didn't live aboard.  Can you let me know what else it could be?

[michaelvu4]

oh, disregard, I understand your response.  thank you