First let me point out that the Refund-O-Meter is only correct once all your income and expenses have been entered and the program is fully operational. With each entry of income or expenses the meter will continue to vary as the program recalculates the return with each step you take. If this annoys you then turn off the meter until the end.
Next ... the program interview flow is poorly designed and it will give you a false refund total early in the interview. The program gives you 100% of the CTC and the third stimulus credit once you have completed the MY INFO tab early in the interview and then much later in the deductions & Credits tab you are asked how much of these credits you got in advance and then the credits are adjusted for the advance payments which will show as a reduced refund amount or an increase in the balance due.
Same thing for the EIC … the program gives you the credit in the refund posted BEFORE you get to the EIC portion of the interview. At that point it asks you a couple of questions that could possibly REMOVE the credit already reflected in the refund posted which is also a point of confusion for many.
One day the programmers may get this changed to more timely reflect the section you are working on as you work on it and not way in advance. Users are not happy when they see the refund being reduced without a good explanation especially when the program says you can get $X as a credit and they see the refund either being reduced or not increased.
And let me see if I can shed some light on this situation that many folks will find themselves in this year ... that advance was probably not the best thing to happen for some. Here is an example for just one child ...
Last year the credit was $2000 of which only $1400 could be refunded after taxes were paid down.
This year the credit is $3000 (or $3600) of which you got 1/2 up front leaving just $1500 (or $1800) for the credit on the return to pay down your tax bill.
So last year the credit on the return was $2000 and this year it is only $1500(or $1800) ... you are short $500 (or $200) on the return. You are thinking the credit went up so my refund should be more but remember you got some in advance. Review the 2020 & 2021 returns side by side to see this in action.
You need to look at the entries from line 24 to 31 on your tax return form 1040. Then compare them to the same lines on last year's tax return. On these lines you will see your Total Tax (line 24) and the deductions from that tax (lines 25 to 32.) That is where you will find the difference between this year and last year, and that may explain why you owe taxes this year or have a lessor refund than expected.
