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Federal refund change

I have had no major financial changes since filing my 2019 return.  My income and withholdings have been relatively flat.  My issue is that my 2019 return showed a $1,175 refund while 2020 return shows $411 tax owed.  My state from 2019 to 2020 both were/are refunds ($517 for 2019 vs. $455 for 2020).  What could have changed?

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Federal refund change

If your son turned 17 in 2020 you lost the $2000 child tax credit.   That comes as a shock to some parents when their first teenager turns 17.    Now instead of the child tax credit you get a $500 credit for other dependents for him.

 

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

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

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3 Replies

Federal refund change

We cannot see your screen, your return or your account.  Have you entered ALL of your 2020 information?  All your income, etc.?  Many tax documents that you need do not arrive until late January or even February, so maybe you do not have it all there yet.

 

 

No one in this user forum can see your tax return or your screen.  There were major tax law changes that began with the 2018 tax year that seem to continue to surprise some people.  Personal exemptions of over $4000 per person were removed beginning with 2018 returns.

 

 Was something different for 2020?  Did you have less income due to the pandemic?  Did you receive unemployment compensation?  If so, did you have tax withheld from it?

 

There are a lot of variables that affect your refund or tax due including how much you earned, how much tax you had withheld, your filing status, the number of dependents you claim, your deductions and credits, etc.  You may have lost Earned Income Credit or the Child Tax Credit— did a child turn 17?  If you received the EIC last year, remember that changes in the amount you earn have a big effect on the amount of EIC you can get. (Sometimes earning more money means less EIC)  Are you 65 or older ?  If so, your standard deduction is higher. Everyone has a higher standard deduction now so it is harder to use itemized deductions.

 

 

And of course, always check your own data entries, looking for errors such as misplaced decimals or extra zeros.

 

https://ttlc.intuit.com/questions/1901008-why-did-my-refund-go-down-compared-to-last-year-s

 

Print out 2019 and 2020 and compare them side by side to see what is different.  The line numbers are different so it is tricky and you have to read them very carefully.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Federal refund change

I entered all of my 2020 info, and my income did not change significantly.  However, my son did turn 17 in 2020.  Would that make a difference?  If so enough of a difference to alter my tax amount by a net $1600?

Federal refund change

If your son turned 17 in 2020 you lost the $2000 child tax credit.   That comes as a shock to some parents when their first teenager turns 17.    Now instead of the child tax credit you get a $500 credit for other dependents for him.

 

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

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
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