TurboTax is messing up the advance child tax credit 2021

[Aimeecordy]

Having the same problem. I have four kids and made no where near the 150,000 cut off between my husband and I. Said screw it and for the first time in 10 years am going to a CPA instead.

[Hjsellers]

Same here. I’m getting the same thing for two kids and had Received the 3000$ in adv ctc but it’s saying in the final tax return amount only 1456 but it should be 4456 with the remaining 3000$. It’s frustrating the heck outta me and I haven’t filed yet and need to ASAP but I’m not until this is fixed. What do we do? 

[Tminey]

I am in the same predicament. I believe I should be receiving an additional 3600 but it just subtracts what I get. One tax expert agreed with me when reviewing and stated to out I received zero in the advance which I wouldn’t do. When clicking for the explanation it reads as if I only should receive 3600 and that is a part of my tax liability and balanced out to zero. It does not read as if I qualify for a total of 7200. Is there a way to see form 1040 before I file? 

[DoninGA]

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@Tminey wrote:

I am in the same predicament. I believe I should be receiving an additional 3600 but it just subtracts what I get. One tax expert agreed with me when reviewing and stated to out I received zero in the advance which I wouldn’t do. When clicking for the explanation it reads as if I only should receive 3600 and that is a part of my tax liability and balanced out to zero. It does not read as if I qualify for a total of 7200. Is there a way to see form 1040 before I file? 

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The Child Tax Credit is entered on your federal tax return Form 1040 on Line 28. It is added to your other tax payments, it is not a separate refund. Your Total taxes from Line 24 are subtracted from your Total tax payments on Line 33. If you have an overpayment then that is entered on Line 34 as your federal tax refund.

You can view your Form 1040 at any time using the online editions. Click on Tax Tools on the left side of the online program screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

[VolvoGirl]

@Tminey   How much is on line 28?  Your tax returns does not show the advance payments you already got just the amount you still get or if you qualify for more. The remaining amount will show up on 1040 line 28. It will either add to a refund or reduce a tax due. 

Before filing you can preview the 1040 or print the whole return
https://ttlc.intuit.com/community/accessing/help/how-do-i-preview-my-turbotax-online-return-before-f...

As soon as you entered your children, Turbo Tax gave you the full amount. So you might see a high refund. Then you enter what you already received so it subtracts it out.  The Child Tax Credit now goes on line 28 instead of 19. You get the remaining amount there.  Which is better since you can get more on line 28 than just reducing the amount of tax on line 16 to zero.

I 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.

[pattersonm]

I am having same issue with Turbotax this year. I received $1500 in 2021 and should get the remaining $1500 this year. What Turbotax should calculate as follows in this scenario: Total Credit - Credit Received in 2021. Translation: $3000-1500 = $1500 (to be received in 2022). Instead, Turbotax deducts $1500 received in 2021 from your non-Child Tax Credit which is completely wrong. I spoke with 3 different Turbotax experts and none could understand nor solve it. Instead, one TT Expert tried convincing me the software was correct. At this point, I gave up on Turbotax and have immediately switched to TaxAct which I believe has high level of accuracy. Currently, I am still filing on TaxAct and the Child Tax Credit is working on it and also includes the breakdown very clearly. It's a pity that I have been using Turbotax for 15+ years and had to switch to another vendor this year.

Regards!

[xmasbaby0]

@pattersonm Sorry you had trouble, but TurboTax is calculating the CTC correctly IF you enter your letter 6419 correctly.     Some users have become confused by the flow of information and think they are not getting the credit when they really are.   People are somehow expecting to see the full amount of the CTC instead of the second half that is all they can get on their tax return.   That "second half" of the CTC is clearly shown on line 28 of your Form 1040 and then calculates on down to the refund on line 35a  or reduces the tax due on line 37.

Since you have used a different software, it is too late for you to use TT now, but for anyone else reading this thread:

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.

[mpearce22]

Turbo tax is not asking me to enter box 2 from the 6419 letter?

I have filled everything out for our taxes.  Without the CTC added to the taxes my child credit is $6k. When I add it in it moves to $3k which makes sense because I received $3k.  But... then $3k is added to my federal owed which to me negates the $3k I received in advance. The federal owed amount shouldn't change, the credit should just get adjusted to $3k.

[DoninGA]

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@mpearce22 wrote:

Turbo tax is not asking me to enter box 2 from the 6419 letter?

I have filled everything out for our taxes.  Without the CTC added to the taxes my child credit is $6k. When I add it in it moves to $3k which makes sense because I received $3k.  But... then $3k is added to my federal owed which to me negates the $3k I received in advance. The federal owed amount shouldn't change, the credit should just get adjusted to $3k.

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If you received the advance child tax credit in 2021 you are required to report the payments on your 2021 tax return.

To enter the advance child tax credit

• Click on Federal Taxes
• Click on Deductions & Credits
• Click on I'll choose what I work on (if shown)
• Under You and Your Family
• On Child and Other Dependent Tax Credit, click on the start or update button

Or enter child tax credit in the Search box located in the upper right of the program screen. Click on Jump to child credit

The Child Tax Credit is entered on your federal tax return Form 1040 on Line 28. It is added to your other tax payments, it is not a separate refund. Your Total taxes from Line 24 are subtracted from your Total tax payments on Line 33. If you have an overpayment then that is entered on Line 34 as your federal tax refund.

You can view your Form 1040 at any time using the online editions. Click on Tax Tools on the left side of the online program screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

[VolvoGirl]

Yes it makes sense.  It is suppose to negate the 3,000 you already got.  Because you already got it.  So it changes your credit from 6,000 to just the remaining 3,000 and removes the 3,000 you already got from your refund or increases the tax due.   

At first the whole 6,000 is added to your refund (or reduced a tax due).  Then you say you already got the Advance for half of it so it reduces the remaining amount back to 3,000 credit.  You can't get the whole 6,000 credit now, only the remaining amount.   If you adjust anything on your return of course it's going to change the bottom line tax due.  

[donna109]

I got a reject on my Irs return for 8812. I looked at form and cannot tell what is wrong.

How do i correct this? I answered all the questions. Have one child and received the 1500.00 advance. 

Line 28 shows the other 1500 credit. So how do i fix this.

[gRuns]

It took me a while to wrap my head around the logic, that it is indeed computing it correctly.  First I manually filled out Schedule 8812 direct from the IRS website, but I still wasn't quite understanding why it wasn't working, because I was hung up on owing taxes, when my total CTC should be $12k (in my case with 4 children) regardless of when I receive the credit, at tax time or as an advance.

I finally just wrote it all down and compared the two options: Half of the credit received in advance AND all of the credit received when filing.

Advance option (hypothetical numbers)

4 kids, so half of credit is 6,000, received 1,000 per month july 2021-dec 2021

Taxable income is X and total tax is 10,000.

No other credits, just the second half of the CTC, so I owe $4,000 (10k-6k).

But I've already received the advance $6k, so that means I'm up $2k (6k advance minus 4k payment)

Now without the advance credit,

Still 10k total tax, but now CTC is $12k

So I get a REFUND of $2k.  And I'm up $2k total.

[KrisD15]

Correct,

Credits are not sent as a separate refund, 

Credits are used against any tax liability (or tax you would have to pay if not for the credit) and if there is more credits than tax, you get a refund. 

[RCJ]

I was made aware  of an issue by the IRS after my tax refund was delayed for over 6 weeks. Turbo Tax reported to me that my taxes were accepted by the IRS on Feb  1. The IRS told me they actually rejected my return because they could not accept it before February 13 or 15 due to the CTC. It was accepted after that but I was never notified of any changes by TT.  I was told by the IRS I have to wait 10 weeks from February 1 before I can receive my refund. I’ve never had a delay with my refund. I don’t know what to think at this point. I was told one thing and something else was going on. So at this point I’m in the waiting game. I don’t know when I will receive my federal refund. My Louisiana state refund came back within 4 weeks. This CTC has messed up everything! 

[ewteall]

experiencing the same thing right now. Waiting for turbo tax to call me back.