Why TT is not calculating other dependent credit (SCH 8812) when child is "US Resident for tax purpose", MFJ having <400k and with me for whole year?

[dhananjay]

This is for tax year 2022. My child is with me for whole year. He is less than 17 years of age. I supported whole year for any of his expenses. He is US resident for tax purpose having substantial presence test. Why turbotax is not adding $500 for my child and what is missing to get that additional other dependent credit?

Further, there are only 3 options to select. "US Citizen or Legal Resident", "Resident Of Canada or Mexico" and "None of the Above" on TT website. If I would choose "US Citizen or Legal Resident" then TT calculates that as $2000 (actual US resident child tax credit).

[ShirlynW]

To qualify for the credit, the child must pass the Citizenship Test.

The IRS states the child must be a U.S. Citizen, a U.S. national , a U.S. resident alien or a resident of Mexico or Canada. (For tax purposes, the term "U.S. national" refers to individuals who were born in American Samoa or in the Commonwealth of the Northern Mariana Islands.)

[dhananjay]

Thank you @ShirlynW for your reply!!

Per IRS website - "You are a resident alien of the United States for tax purposes if you meet either the green card tes...."

I mentioned that my son has already passed substantial presence test. So If I choose "US Citizen or Legal Resident" from the options available then TT is calculating it as $2000 credit. Is that correct? As my son doesn't have SSN but ITIN, I am not sure if he qualifies for CTC but he qualifies for Credit for Other Dependents. Please let me know where I am missing.

I just tried to check if my son qualifies for other dependent tax credit on IRS website and it tells me that son is not going to get child tax credit but he is eligible to get $500 for "Credit for other dependents"

[ShirlynW]

No. You may not claim the child tax credit for a child with an ITIN. The child must have an SSN to be a qualifying child eligible for the child tax credit (CTC) and/or additional child tax credit (ACTC).

For more information

[dhananjay]

@ShirlynW I never said child tax credit but question is also about other dependent credit. I also provided reference here from irs website that it shows me itin applicable. I'm still not sure if this is limitation on turbo tax but my cpa has calculated that. I wanted to shift to TT but either it is limitation on software side or I'm not following what you are saying.

[dhananjay]

@ShirlynW Tried to record from IRS website with dummy information. Please try with same options those I have chosen and it clearly says on the last page that B (who has ITIN and resident alien for tax purpose) can be other dependent.

I wanted to switch to TT for the first time and your or any other tax expert's help is really appreciable in knowing if this is limitation or something else.

Here is the recording.

[dhananjay]

And this is from TurboTax community URL - https://ttlc.intuit.com/turbotax-support/en-us/help-article/family-tax-credits-deductions/500-credit... 

[JohnW152 · Accepted solution]

Based on the information you provided -- and the recording of the IRS interactive interview, which was very helpful -- it certainly seems that the second child should only be eligible for the Credit for Other Dependents, as you suggest.

One thing before the next step, though.  As you say, your child shouldn't be getting the $2,000 credit, since he has an ITIN.  As described in What is an ITIN? in the IRS' Publication 4757, Individual Taxpayer Identification Number (ITIN), the IRS has a certain range of numbers that are reserved for ITINs:

All valid ITINs are a nine-digit number in the same format as the SSN (9XX-8X-XXXX), begins with a “9”and the 4th and 5th digits range from 50 to 65, 70 to 88, 90 to 92, and 94 to 99. 

If your child's identifying number doesn't fall within these ranges, you should check with the Social Security Administration to make sure your child has the correct identifying number.

That said, if your child actually does have an ITIN rather than an SSN, and you're still not able to get the Credit for Other Dependents to generate for him, use the workaround below.

Indicate in the TurboTax interview that this child is "other" (not child), and then indicate he's a legal resident, and lived with you the entire year.  This will then list the child and check the box for "other dependent," awarding the appropriate $500 credit. 

Do not be concerned that you are perjuring yourself by making these entries.  These are TurboTax entries only, and aren't questions on your actual tax return that you'll be answering wrong.  These are merely answers that will get the return to provide the proper information to generate the correct credit.

[dhananjay]

Thank you @JohnW152 for your reply!

Yes, by using workaround I was able to get $500 for my child having ITIN on TT platform.

Only the issue I am seeing is that this should have been natively in turbotax so neither I needed to do such workaround nor I needed to create ticket here. As this is tax platform, I guess it should have all terminologies from IRS like "US resident alien". If I would not tested this from different CPA, even though by providing all truth information, I (or anybody) would have lost this credit on turbotax platform.