Advanced child tax credit

[Adorelilith]

Someone else claimed my dependents last year but they had my permission and they received the child tax credit advance for both of them. When filing with turbo tax this year, with them as my dependents, do i say i didnt recieve the credit for them? Will i receive the full credit? Will the other person have to pay the advanced ctc back? I dont want to make anyone owe when they had my permission to claim my dependents.

[MaryK4]

You will want to say you did not receive the advanced credit for them- even if the other person had permission, they should have returned or stopped the advanced payments last year.  Even if you say you did not receive the payments, because you are claiming them this year, the other person may have to pay back the money received and after a delay, the IRS would reconcile and send you the entire amount.  

There is repayment protection available from the IRS:  

If you qualify for repayment protection, the amount of your tax liability from excess advance Child Tax Credit payments is reduced by up to the full repayment protection amount. The full repayment protection amount equals $2,000, multiplied by the following:

• The number of qualifying children that the IRS took into account in determining the IRS’s initial estimate of your advance Child Tax Credit payments, minus
• The number of qualifying children properly taken into account in determining the allowed Child Tax Credit amount on your 2021 tax return.

Example: You properly claimed three qualifying children on your 2020 tax return, but claim only one qualifying child on your 2021 tax return. You can receive up to $4,000 in repayment protection (that is, $2,000 for each excess qualifying child) if you qualify.

You will be able to apply the full repayment protection amount of $2,000 for each excess qualifying child if your modified adjusted gross income (AGI) is at or below the following amounts based on the filing status on your 2021 tax return:

• $60,000 if you are married and filing a joint return or if filing as a qualifying widow or widower;
• $50,000 if you are filing as head of household; and
• $40,000 if you are a single filer or you are married and filing a separate return.  

(See 2021 Child Tax Credit and Advance Child Tax Credit Payments — Topic H: Reconciling Your Advance Chil...)

[Opus 17]

If you received no credit in your name, you can claim the credit now.  You don't have to report the credit claimed by the other person.  

HOWEVER, the number of cases where someone else can legally claim your children "with your permission" is limited.  If your children live with you, the only people who can legally claim your children would be the other parent (if you live together unmarried or you are separated or divorced), or another close blood relative (like your parents, siblings or aunt/uncle) but only if they also lived with the children.  If your children don't live with you, you can't claim them and you can't legally give permission to anyone else.  The person they live with might be able to claim them without your permission.

You may have committed tax fraud, or allowed someone else to commit tax fraud.  

If you want more information, we will need more details about your children's living situation. 

[Adorelilith]

I did not "commit tax fraud" im aware of who and who is not allowed to claim my children on their taxes and why. I allowed my mother, who i was living w at the time, to claim my children on her taxes because she has been taking care of me and children when the pandemic hit and i had gotten into a bad car accident while pregnant which caused alot of health isssues. She financially supported us under her own roof so she claimed me and my children on her taxes. Thank you.

[Adorelilith]

I am aware of who and who is not allowed to claim my children on their taxes and why. I allowed my mother, who i was living w at the time, to claim my children on her taxes because she has been taking care of me and children when the pandemic hit and i had gotten into a bad car accident while pregnant which caused alot of health isssues. She financially supported us under her own roof so she claimed me and my children on her taxes. Thank you.

[Opus 17]

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@Adorelilith wrote:

I am aware of who and who is not allowed to claim my children on their taxes and why. I allowed my mother, who i was living w at the time, to claim my children on her taxes because she has been taking care of me and children when the pandemic hit and i had gotten into a bad car accident while pregnant which caused alot of health isssues. She financially supported us under her own roof so she claimed me and my children on her taxes. Thank you.

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Thank you.  In that case, if your mother does not claim the children, she will have to repay the Advanced CTC payments unless she is low income and qualifies for repayment protection.  See this FAQ.

https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-t...

Also, if you claim the children and did not receive the round 3 stimulus ($1400 per dependent), it will be added to your tax return as well.  The person who received the stimulus for your children will not have to repay it.  (The stimulus rules are different than the child tax credit.)  The round 3 stimulus might have been based on your 2020 or your 2019 tax return.

Cheers.