Child Tax Credit Error?

[IrieCharm6]

I have 3 dependents one being a 7mth old other two are 7 and 3.  And my child tax credit is only $4200. This year it is $1800 per child. I Have an AGI of $31k (well within the limits.) Why am I not getting the full amount??

Filing HOH

[JohnW152 · Accepted solution]

Under the rules for 2022 and 2023, you're only entitled to receive Child Tax Credit up to the amount of your tax liability.  The amount of Child Tax Credit you can receive has changed since pandemic-period legislation allowed for a much larger amount in tax year 2021. 

The actual amount of Child Tax Credit you'll actually receive for 2023 is probably significantly lower than $4,200.  If your AGI is roughly $31,000, your taxable income -- generally, your AGI minus your Head of Household standard deduction of $20,800 -- would be roughly $10,000.  The tax for Head of Household on $10,000 would be $1,003 -- see the IRS' Tax Tables. 

Under the rules for tax year 2023, you're only entitled to receive Child Tax Credit up to the amount of your tax liability.  So, if your tax liability is roughly $1,000 or thereabouts, that's the amount of Child Tax Credit you'll receive.

See the TurboTax Help article Why is my 2023 Child Tax Credit smaller than last year's? for more information.

[xmasbaby0]

You are mistaken.  The refundable amount of child tax credit for 2023 is $1600---not $1800.   The law has not changed.

The 2021 child-related credits were very generous.  Lots of people are still being taken by surprise when they find out the credits for 2022 and 2023  are lower than they were for 2021.

The tax laws changed for child-related credits and are much less generous for 2022 and 2023.

Make sure you have entered your child as a dependent in My Info, and that you have entered the child's Social Security number.    Careful— do not say that your child’s SSN is not valid for employment.  If your child was born in 2023 make sure you said he lived with you the whole year.  There is an oddly worded question that asks if the child paid over half their own support.  Say NO to that question.

Have you entered income from working in 2023?  If not,  you will not receive an income tax refund based on having dependent children.

The rules for getting the child tax credit on a 2021 tax return and now on a 2023 return are very different.  For 2021 you could get $3600 for a child under 6 or $3000 for a child between 6 and 17 even if you had no income/did not work.   That is NOT the way it will work for your 2023 tax return.  The “old” rules are back. 

  The maximum amount of the child tax credit is now $2000 per child; the refundable “additional child tax credit” amount is $1600.   In order to get that credit, you have to have income from working.  The credit is calculated based on the amount you earned above $2500 multiplied by 15%, up to the full $1600 per child. If the amount you earned was too low, you will not get the full $1600.

 If your child is older than 16 at the end of 2023, you do not get the CTC.  But you may still get the non-refundable $500 credit for other dependents instead.

https://ttlc.intuit.com/questions/1900923-what-is-the-child-tax-credit

https://ttlc.intuit.com/turbotax-support/en-us/help-article/taxation/additional-child-tax-credit/L6x...

https://www.irs.gov/help/ita/does-my-childdependent-qualify-for-the-child-tax-credit-or-the-credit-f...

And for the Earned Income Credit—-the rules are back to the “old” rules—

Those under 25 and over 65 without children are not eligible as they were uniquely in 2021.   And you cannot use your income from any earlier tax year to get the EIC for a 2022 return.  There is no “lookback” for 2023.  EIC for 2023 will be based on the income you earned by working in 2023.

https://ttlc.intuit.com/questions/1899157-what-are-the-qualifications-for-the-earned-income-credit-e...

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

Look at your 2023 Form 1040 to see the child-related credits you received

PREVIEW 1040

https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing

Child Tax Credit line 19

Credit for Other Dependents line 19

Earned Income Credit line 27

Additional Child Tax Credit line 28

[IrieCharm6]

Hey John, 

That makes perfect sense now.  Thank you for your clarification😀