TurboTax is messing up the advance child tax credit 2021

[kb101]

I'm trying to enter that we received $3000 in advance child tax credit for our 2 kids in 2021 (letter 6419 from the IRS).  As soon as I enter the $3000, TurboTax glitches and adds that full 3K to our federal tax due, like I have to pay the full amount back.  It should only be deducting it from my total $6K child deduction for 2021, not making me pay it back in taxes.  A rep on the phone said this was an issue with TurboTax that was going to get fixed, but I have not heard anything for multiple weeks.  Can someone help me understand what the problem is and when it will be fixed?  I'd like to get my taxes done early but can't with this issue. 

[AliciaP1]

TurboTax is only taking away the Advance Child Tax Credit you entered.  When you start your return and/or add your dependents to your info, TurboTax assumes you will receive the full Child Tax Credit of, in your case, $3,000 per child.  Once you enter that you already received the $3,000 you mentioned, it removes that portion from your full credit.  Without that, your amount due on the tracker at the top of the screen goes up.

[xmasbaby0]

The "refund monitor" starts off by giving your all of the stimulus money and all of the child tax credit because the software does not know yet that you received stimulus money or that you received some advance child tax credit payments.    That gets reconciled later.

That "refund monitor" changes as you enter information.      That is normal.   And you cannot take it seriously until you enter ALL of your information---even though it is so tempting to believe that the highest amount is the "right" refund.

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.

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.

[kb101]

We did recieve our IRS letter and entered them exactly- $3000. I understand the software will adjust the default deduction, but it doesn’t seem to be doing that. As soon as I enter $3K where it asks for the IRS letter, my federal tax due immediately goes up by the same amount: $3K. And that $3K stays there as I try to do the rest of my taxes. It’s acting as if the advance child tax credit was a loan, and now I have to pay it back in full, not just lower the default deduction. I spoke with someone a couple weeks ago from TurboTax on the phone and she spent 20-30 minutes looking at my return; she had others look at it too. She said it was an issue that they are trying to fix. She sent me this link: https://ttlc.intuit.com/community/tax-return/help/why-am-i-getting-a-message-that-i-don-t-qualify-fo... 

I just want to know if this really is a glitch and what the status is for fixing it. I get an error when I try to sign up for status updates.

[JamesG1]

The credit is computing correctly and you are able to view the changes in this two-step process.  Your refund amount changed because you are: 

• First, given full credit for the Child Tax Credit, then
• Second, the benefit of the credit was reduced by the amount of advance payments reported.

In the software, TurboTax computes that you qualify for the Child Tax Credit and gives you immediate credit for the total amount of the Child Tax Credit. 

You are able to view the Child Tax Credit on line 28 of the Federal 1040 under Tax Tools / Tools / View Tax Summary / Preview my 1040.

Report the Advance Child Tax Credit payments received under Federal / Deductions & Credits / Your tax breaks / Advance payments, Child and Other Dependent Tax Credits at the screen Tell us about any Advance Child Tax Credit payments. 

• In box 1 report the amount of the advance payments. 
• In box 2 report the number of qualifying children listed on your IRS Letter 6419, not the number of qualifying children you are reporting on your 2021 Federal 1040 tax return. 

TurboTax then reduces the Child Tax Credit by the amount of the advance payments and posts the final amount again on line 28 of the Federal 1040.

You may again view this under Tax Tools / Tools / View Tax Summary / Preview my 1040.

The computations on IRS form 8812 Credits for Qualifying Children and Other Dependents and your 2021 Federal 1040 tax return can be viewed at Tax Tools / Tools / View Tax Summary / Preview my 1040.

[Billyjow]

I filed my taxes and there is nothing on line 28, but there is on 14e and 14f? Am I going to have to amend my taxes to fix this? 

[Billyjow]

I filed my taxes and there is nothing on line 28, but there is on 14e and 14f? Am I going to have to amend my taxes to fix this? 

[JamesG1]

If your return has been transmitted and rejected by the IRS, you can correct your tax return and re-transmit.

If your return has been transmitted and accepted by the IRS, you can amend your Federal 1040 tax return.

Amended tax returns are expected to be available March 17.  See forms availability here.

Are the amounts on lines 14e and 14f on IRS form 8812 Credits for Qualifying Children and Other Dependents?  What are these amounts?  Please clarify.

[Billyjow]

14e is my total advanced/additional child tax credit and 14f is what I received last year and 14g is what is left to be paid to me. It was never generated into line 28 when I filed my taxes.

[DMarkM1]

Okay a little more clarification.  Is one of the boxes in 13 a/b checked?  Did the amount on line 14g flow through 14H down to14I?  As those are what go to the form 1040. 

If there is a box in 13 checked then the 14G amount should continue down to 14I as the entire credit is refundable.  

If no boxes are checked then line 15 a-h come into play as part of the credit becomes non-refundable.  

[Billyjow]

Yes, 13a is checked and 14g and 14l have the same amount on both lines. There is nothing on the 15 lines.

[DawnC]

Check Line 19 of Form 1040.   The non-refundable portion of the Child Tax Credit will be found there.    Your total credit is Lines 19 and 28.   

@Billyjow

[Scott335]

As soon as I entered a 2nd W-2 for my wife, it took out the $3k advance child credit and now we owe. We are well under the income thresh holds. The explanation shows the 1st $3k deduction but not the 2nd now.?

[VolvoGirl]

The W2 has nothing to do with the 3,000 Child Tax Credit advance.   You owe because you added more income and the withholding on it wasn't enough to cover the tax on your total income.  

Because you only get one standard deduction no matter how many W2s you put in. Turbo Tax starts out by giving you the Standard Deduction.  You entered more income when you entered the second W2 but you didn't enter more deductions.  And each job only withheld taxes like it was your only job for the year.  You might want to adjust your withholding.  Also as you add more income you might not be getting as many credits as before like the EIC credit.  And it was probably giving you the EIC credit until you went over.

See,   https://ttlc.intuit.com/community/refunds/help/why-did-my-refund-drop-when-i-entered-a-second-w-2/00...

Then post more about your 3,000 advance.   How many children?   How much advance did you already get during the year?  You only get the remaining half as a credit on line 28.  It either increases your refund or reduces a tax due.   

[Mannisha94]

I believe you I’m have the same problem i only received half payment 3,600 for two children under five i was expecting two receive 3,600 for a total of 7,200. But when i do it takes it away . Please let me know if you get a answer.