Stimulus check payment wrongly entered as a child credit tax by Turbo Tax

[DHad]

Hello Turbo Tax,

I am confused because when I entered my stimulus payment in the TurboTax form, it appears as a child tax credit, line 14f. This increased my federal tax due significantly. Is this a Turbo Tax glitch? I have not found a way to correct it. Please advise. Thanks in advance.

[xmasbaby0]

It is not a glitch -- it is your own user error.   If you received the 3rd EIP payment  as shown on letter 6475 you were supposed to enter that information in Federal Review for the recovery rebate credit--not on form 8812.   

Letter 6419 shows advance child tax credit payments which you enter on form 8812.

[DHad]

I did enter that information in Federal Review for the recovery rebate credit, yet it appears on form 8812. I did not enter any information on form 8812 to the best of my knowledge.

[xmasbaby0]

Did you receive letter 6419 or did you receive any advance child tax credit payments between July and December?

Is there an amount on line 30 of your Form 1040?   

[DanaB27]

No, there isn't an issue please follow these steps to enter your advanced Child Tax Credit received:

 Click on the "Search" on the top and type "Child tax credit"

1. Click on “Jump to Child Tax Credit” 
2. Continue through the questions until the "Tell us about any advance Child Tax Credit payments" screen and enter the advance payment amount from letter 6914.
3. Continue through the questions.

You can see your remaining Child Tax Care Credit amount on line 28 of Form 1040. 

To preview your Form 1040:

1. Click on "Tax Tools" in the left menu
2. Click "Tools"
3. Click "View Tax Summary" in the Tool Center window
4. Click on "Preview my 1040" on the left

Please see What is the Child Tax Credit? and IRS 2021 Child Tax Credit and Advance Child Tax Credit Payments FAQ for additional information.

To verify/enter your third stimulus payment received:

1. After entering all your information click "Search" at the top right and type "Stimulus".
2.  Follow the jump to link (if you do not qualify for the Recovery Rebate Credit the stimulus questions will not come up). 
3. On the screen "Let's double-check the amount you received" you will be asked about the amount of third stimulus payment you received. TurboTax will then calculate the amount of stimulus payment remaining that you are still entitled to get.  
4. Any stimulus amount remaining due to you will show as The Recovery Rebate Credit on line 30 of Form 1040.

Please see What are the eligibility rules for the Recovery Rebate Credit? for additional information.

[DHad]

No to both questions.  I don't have any children. However, and for example, line 19 indicates that I filled out schedule 8812. What is scheudle 8812?

19 Additional tax from Schedule 8812 ...

[xmasbaby0]

In case you misunderstood a screen where you had to answer a question about the child tax credit:

Everyone has to answer whether they received advance child tax credit payments.   If you did not receive any of those payments between July and December you need to answer that you did not receive any payments.

There are so many scenarios with those payments---like divorced/never married parents who have issues over who received the payments, who claimed the children, etc. --- the software has no way of knowing if any of that involves you---so you have to answer the questions about it. 

Please follow these steps to indicate you did not receive any advanced payments:

1. Click on the "Search" on the top and type "Child tax credit"
2. Click on “Jump to Child Tax Credit”
3. Continue through the questions until the "Tell us about any advance Child Tax Credit payments" screen and select "No".
4. Continue through the questions.

[DHad]

I thought I had done all that as you instruct. I've used Turbo Tax many years before and have never had this issue with child tax credits. I'll have to go back and ammend.

[xmasbaby0]

@DHad The child tax credit changed for 2021.   Since you have no children you may have been unaware of the dramatic change in the CTC.   Do you mean that you already filed your return?   If you already filed, you will need to wait for the return to be fully processed before you amend.   If you have not filed, do not click on anything that says "amend"----just make the corrections before you e-file (that is not "amending")

[DHad]

Thank you very much for your advice. Yes, I had filed my return already, and thus I am amending after receiving a confirmation that my returns were accepted by the IRS, as per instructions from TurboTax in the amend form.

[KrisD15]

I am sure it is tempting to file an amended return, especially since the original is showing an inflated tax liability, but don't. It can make matters worse at this point. 

The IRS has had to do some extra work these past years and the first thing they will do is look over those credits, match it to their records, and make the adjustment. 

The IRS will adjust your original return, you will NOT need to file an amended return. 

You can use the TurboTax amend program if you need that to figure your true tax liability, but don't send in the 1040X.

If your true tax liability is less (and it most certainly will be) only make that lesser payment.  

The IRS will straighten it all out.

If you do generate a "mock" 1040X, remember that the tax due or refund shown will be under the assumption that the first return was processed. For Example, if the original return showed you owed 2,000 and the 1040X shows you get a 1,400 refund, that means you owe 600 total (2,000 it thinks you paid - 1.400 refund = you really should pay 600)

[DHad]

Thank you very much for your helpful advice. However, I had gone ahead, before I read your message, and sent the 1040X. Sigh. Hopefully the IRS will straighten it all out despite this.

[DHad]

Do you mean to say that if for any reason we do not answer the question about child tax credit, that then it will appear as a 'yes'? That does not make sense. I still consider the possibility that this could have been a glitch on Turbo Tax's program. The amount of $1400 appeared as child tax credit, and I don't remember adding that amount except for the stimulus check.  I am reconsidering ever using Turbo Tax again -although I have used for many years consecutively without issue.

[Cynthiad66]

IRS has all of the information for the Stimulus payment and the Advanced Child Tax Credits and will make adjustments as necessary.  You can verify the amounts to ensure accuracy.  The Notice from the IRS will explain everything.

Don't worry about the form 104X, the IRS will most likely not process it.

@DHad

[DHad]

Thank you very much for that additional clarification.