I'm trying to figure out if it makes more sense for me or my ex to claim the children. why is the tax reduction for my 4th child $3100 instead of the expected $2000?

[addaire]

tax year 2020. didnt see this last year

[SweetieJean]

They enhanced Child Tax Credit is not retroactive for 2020.  Rather, it takes effect for tax year 2021 (returns filed in 2022), so I'm not sure where that $3100 is coming from.  Please check everything carefully.

But only the person with whom the children lived for more than 50% of the year can claim them,  unless the Custodial parent releases this to the Non-Custodial parent via Form 8332.

About Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent |...

[addaire]

Update: after trying in vain to figure out what was going on, i contacted turbotax support. We ran through all the options, confirming the 3100 increase in credit, but unable to see what was causing it. The suggested solution was to proceed toward filing what we believed to be wrong, Nd at the very last review, my taxes went back up by $1100. I was a little irked that in making that correction it did not even acknowledge finding an error. It just said everything looks good! Anyway, if you see something that truly doesnt look right, just proceed to file it and turbotax may fix its error.

thanks @SweetieJean for your reply. Best of luck to anyone else that sees this problem.

[Opus 17]

$1100 is the amount of recovery rebate for a child dependent.  ($500 for round 1 and $600 for round 2).

The recovery rebate is calculated based on whatever you are eligible for when you file your 2020 tax return, minus whatever you received as a stimulus check in round 1 and round 2 last year.  In your case, it appears that you claimed 3 children in 2019, and received stimulus payments for 3 children (your notice 1444 and 1444-B).  If you claim 4 children as dependents now, you would qualify for a recovery rebate for the 4th child.  That's why the 4th child was worth $3100 instead of $2000.

If your ex did not receive stimulus checks for the children, then she would get the rebate added to her tax return now if she claimed them instead of you.  That might mean your ex would get up to $3100 for each child, while you only get $2000 per child.  But iIt's important to know that the stimulus rebate is based on the number of children, not their identity.  So if you claimed children 1, 2 and 3 last year, and your ex claimed #4, and this year you claim #4 but not #1, 2 or 3, then you would not get the rebate.

How you claim your child dependents on your tax return may also affect your $1400 round 3 rebate.  If you didn't get the rebate yet, it may be based on the return you submit now.  (If you already got the $1400 round 3 rebate per child, then how you file won't change anything.)

I can't tell the exact strategy to maximize the tax refund between you and your ex.  It would depend on your ex's income and whether they qualify for the entire $2000 CTC based on their income or only a reduced amount.  Most likely, the person who was paid for the fewest children on the stimulus checks should claim them all this year, assuming that you and your ex are willing to share the rewards of cooperation.  

Also, be aware of the rules for claiming dependents as regards to which parent has actual physical custody.  I described them all yesterday for someone else here, https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-day-care-deduction/01/2205134...