Why is Turbo Tax Premier 2021 Schedule 8812 line 5 incorrect? According to IRS.gov Schedule 8812 line 5 worksheet, this should be $6000 (2 kids < 18 yo) for me not $4000

[net-jms]

I entered my dependents as I have for the past 15  years of using Turbo Tax.  I also entered my Letter 6149 details.  Turbo Tax listed my credit in Schedule 8812 line 5 as 4000, even though the IRS.gov worksheet for Schedule 8812 Line 5 shows that it should be 6000.  The only way to correct this was to go into forms mode, select Line 5, select Edit from the menu bar then override.  Unless I'm doing something completely wrong here, this seems like a pretty bad bug that would have cost me $2000.

[JillS56]

Before I can say that TurboTax may be wrong, I need to ask some questions.  There is a phase-out for the Advanced/Refunded Child Tax Credit.    Is your income higher than last year?   

The Child Tax Credit phases out in two different steps based on your modified adjusted gross income (AGI) in 2021.

The first phaseout can reduce the Child Tax Credit to $2,000 per child.

• That is, the first phaseout step can reduce only the $1,600 increase for qualifying children ages 5 and under, and the $1,000 increase for qualifying children ages 6 through 17, at the end of 2021.

The Child Tax Credit begins to be reduced to $2,000 per child if your modified AGI in 2021 exceeds:

• $150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
• $112,500 if filing as head of household; or
• $75,000 if you are a single filer or are married and filing a separate return.

The first phaseout reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you.

The second phaseout can reduce the remaining Child Tax Credit below $2,000 per child.

The Child Tax Credit won’t begin to be reduced below $2,000 per child until your modified AGI in 2021 exceeds:

• $400,000 if married and filing a joint return; or
• $200,000 for all other filing statuses.

The second phaseout reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you.

Child Tax Credit

2021 Child Tax Credit and Advanced Child Tax Credit

Do you fall within the first phase-out?   That may be why your 8812 is showing the $4,000 rather than the $6,000.   

When you override an entry it may have problems getting your return to pass the Review process.   Normally when there are overrides you cannot e-file your return.   

After you review this information and still feel that the child tax credit is calculating incorrectly, then you could send us a token number and someone could take a look at your return.   To get us a token number go to:

1. Tax  Tools
2. Tools
3. Share my file with Agent
4. When you click on the Share my file with Agent it will give you a token number.
5. Respond to this post with the token number and someone will take a look at your return.

[net-jms]

Thank you for the detailed reply. 

Our household income in 2021 did not change significantly as compared to 2020.

This is what I originally found when researching this in the Turbo Tax Premier 2021 "help" within the application:

What are the limits of these credits?

Your income matters. These credits are reduced by $50 for every $1,000 that your adjusted gross income (AGI) goes over these amounts:

- Single, Married Filing Separately, Head of Household, or Qualifying Widow(er) - $200,000
- Married filing jointly - $400,000

That is the reason I thought I could change it, because the help clearly lists that the reduction occurs once AGI exceeds 400k for married filing jointly, which is my situation.  Is the help/documentation incorrect?

[KrisD15]

There are two different phaseouts for the Child Tax Credit for Tax Year 2021 partly to account for the increased per-child amount.

TurboTax includes informational links to help explain the calculation. 

These links are not provided for the customer to alter calculation results. 

Over-riding calculations is not recommended and can void audit protection. 

According to the IRS:

"How does the first phaseout reduce the 2021 Child Tax Credit to $2,000 per child? (added June 14, 20...

A4. The Child Tax Credit begins to be reduced to $2,000 per child if your modified AGI in 2021 exceeds:

• $150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
• $112,500 if filing as head of household; or
• $75,000 if you are a single filer or are married and filing a separate return.

The first phaseout reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you.

How does the second phaseout reduce the remaining $2,000 Child Tax Credit? (added June 14, 2021)

A5. The Child Tax Credit won’t begin to be reduced below $2,000 per child until your modified AGI in 2021 exceeds:

• $400,000 if married and filing a joint return; or
• $200,000 for all other filing statuses.

The second phaseout reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you."

IRS LINK

[net-jms]

Will Turbo Tax Premier 2021 fix the incorrect information in their Help section, as show in the screenshot I provided earlier?

[JohnB5677]

I have reached out and we would like to open an investigation into this issue, but I will need your help to do it.

We would like to take a deeper look at this. However, we need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:

 TurboTax Online:

1. Sign in to your online account.
2. Locate the Tax Tools on the left-hand side of the screen.
3. A drop-down will appear. Select Tools
4. On the pop-up screen, click on “Share my file with an agent.”
5. This will generate a message that a diagnostic file gets sanitized and transmitted to us.
6. Please provide the Token Number that was generated in the response.

@net-jms

[Anonymous]

I was checking my figures and my line 5 was calculated incorrectly as well.  Intuit Turbo Tax was showing $4,050 and I calculated $4,100.  Is the line 5 issue going to be fixed?

[RobertB4444]

@Anonymous  Currently there is no known tax issue with line 5.  In your case it sounds like there is a rounding error since the credit is reduced $50 for each $1000 or part thereof that your income exceeds the modified AGI threshold.

[net-jms]

I'm using the application TurboTax, not the online version.   As you can see in my previous posts, I show the help menu from the TurboTax application which shows the mis-leading details which led me to think there was a problem with the application.  Is there any other info I need to provide?

[DaveF1006]

To clarify, how many children do you have and did you receive advanced credits already? If so, how much. Also, how old are the kids?

@net-jms

[net-jms]

2 kids, I (unfortunately) received the advance credits in 2021, and the kids are 16 and 17 now; were 15 and 17 on 12/31/21.  I did the "line 5 worksheet" from the IRS website and found that we hit the first phaseout.

As noted in my previous reply, the problem I have here is the help output on the desktop appliation which clearly states that the phaseout is at 400k for married filing jointly.  I included screenshots.  This is what led me to the assumption that the 4000 figure was incorrect.  Unless I'm completely reading that help output wrong, it seems that Turbo Tax needs to update this for 2021.

[jerryllave]

I received a notice from the IRS that my schedule 8812 line 5 calculation was incorrect, and that now I owe the IRS ~$4000 because of this error (includes interest). I double checked the math using my 1040 form information and the line 5 worksheet that I found on www.irs.gov/schedule8812 and indeed, the figure that was used in the calculation for line 5 was 9000 instead of 6000. Clearly there is some math or calculation error that occurred somewhere. Even after updating the software today, I am not seeing that number getting changed in my form (which I'd already filed). What can be done to correct this?

[JamesG1]

The computation on line 5 of Schedule 8812 Credits for Qualifying Children and Other Dependents is determined by the entry of dependents / qualifying children entered in the tax software.

What dependents / qualifying children are you reporting at MyInfo?  What ages are the dependents / qualifying children?

@jerryllave

[jerryllave]

We had only 3 dependents listed in the 4a and 4c lines but what appears to have been missing was the amounts sent by the IRS directly to our account which we didn't get a tax form for. After reconciling those amounts with a TurboTax expert we were able to figure out where the deficit occurred. So my advice for anyone seeing this in future: look at your bank statements from last year to see if there were other payments sent by the IRS (especially from July to December and one time in March).

[JamesG1]

Schedule 8812 line 5 was not miscalculated?

On the 2021 1040 Federal tax return:

• Line 12 of Federal Schedule 8812 computes the total Child Tax Credit, and
• Line 28 of the Federal 1040 which reports the refundable amount.

The full amount of the Child Tax Credit is not reported on the 2021 1040 Federal tax return, only the net amount after applying the advance payments.

To view Federal 1040 line 28, go to Tax Tools / Tools / View Tax Summary / Preview my 1040.