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Advance payments in 2021 on child tax credit

Forum|Forum|4 years ago
January 30, 2022
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The advance child tax credits are confusing me. We decided to take the advance credits for the 6 months starting July 2021 and were expecting to get the other half in 2022 of the $1500 based on the letter that went out from the Biden administration on 6/25/21. We qualify for this based on AGI so I'm wondering why I'm having to pay for Federal this year as I was expecting to get the extra $1500 when filing taxes and I'm not? We have our Federal tax withholdings set so each year we get less of a return or break just about even and have it spready out through the year, so maybe that's it? Since we meet the requirements to get the full $3000, half in 2021 and the other in 2022 should we be expecting the other $1500?

Best answer by MinhT1

Thanks for hanging with me. Yes, I got it at $1400 PP, but like you said that's separate. I do have further information and H&R Block online tax prep does produce the same results at TurboTax showing I owe, with a few dollars or TurboTax. The H&R free estimator without actually creating an account does not show everything, which is expected.

Entering in all of the tax information goes well on both until you enter in the advance child tax credit of $750 for my wife and I and then it immediately jumps to owing Federal. My assumption on both prep sites was that I would be receiving another $1500 in cash with it be monthly at $250 for 6 months or a return on my taxes offsetting what I owe. It's not the case, but I'm not an expert to do line by line to see where the issue may be. Although I do show an additional refund of $1500 on line 28 on the 1040 it's not producing money in my pocket. I guess for a test I could remove it and see if my Federal amount due increases.

The way I understood the entire advance child tax credit is that I would get part of the $3000 in 2021 and the other half in 2022 after filing taxes, but maybe I will not get that until I file my taxes in 2023 for year 2022.

Other than paying someone to do my taxes or sitting down with me and running over line by line I do think it's more accurate now that I've tested with another online tax prep and entering data more than once. Never had this issue before until all this stimulus package stuff and advance child care tax credit started happening.

Unless you have anything else for me to look over I'm going with this. I do appreciate your time and guiding me along.

I can assure you that the remaining child tax credit of $1,500 is included in your tax return as it appears on line 28 of your form 1040.

M

MinhT1

If you answered correctly the TurboTax questions in the Child tax credit section, the balance of your child tax credit should be included in your refund (or subtracted from your tax due). It is not shown separately.

To check that the balance of the child tax credit is correctly included, you can preview your form 1040 and check that the child tax credit is correctly calculated on line 28 of your form 1040.

Please preview your form 1040 by following these steps:

In TurboTax, open your return
In the left-hand column, locate Tax Tools, click on the drop-down arrow then click on Tools
On the Tools Center page, click on View Tax Summary
In the left-hand column, click on Preview my 1040
Your form 1040 will display.
Scroll down to line 28 - Refundable child tax credit or additional child tax credit from form 8812 and you should see the amount of this credit on this line.

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R

rgcaryjrAuthor

Hello MinhT1.

Thank you for the reply. I reviewed those areas and already entered the advance child care tax credits correctly per letter. I also reviewed 8812 and looked at all lines and where it mentioned the $3000 credit. When you follow the calculations on form 1040 or 8812 you end up with $1500 refund as shown in the forms, which I assume is in addition to the advance child credits. We are MFJ and last year (2020 return) we owed a little less than $600 on Federal since we have our federal exemptions adjusted to where we won't have as big of refund. This year with slight income increases while still MFJ we owe a about $900. I was hoping the second half of the $1500 advance child credit would have offset that, but it's not and that's where I get confused. Could it be that the 2021 AGI for MFJ is now above the limit to get the second half of the $1500 advance child tax credit? We're still within the amounts to qualify for the full amounts.

I pulled this from the IRS website:

These advance payment amounts begin to be reduced if your modified AGI exceeds:

$150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
$112,500 if filing as head of household; or
$75,000 if you are a single filer or are married and filing a separate return.

M

MinhT1

Your child tax credit for 2021 is based on your 2021 AGI. It is not phased out if your AGI is less than $150,000 (for married filing jointly) and you should get the full credit of $3,000 for a child aged 6 to 17 (minus any advance) on your tax return.

Did you preview your form 1040 to check what amount is on line 28? (see my previous answer).

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D

DaveCrook

Me and my spouse received the advanced child tax credit for our son in the amount of $250.00 each month for six months ending in December 2021. We did not receive letters as we moved to a new home. Do we enter the total of $1500.00 that we received on each of our letters?

DoninGA

Employee

@DaveCrook wrote:

Me and my spouse received the advanced child tax credit for our son in the amount of $250.00 each month for six months ending in December 2021. We did not receive letters as we moved to a new home. Do we enter the total of $1500.00 that we received on each of our letters?

If the Total of the advance child tax credits received in 2021 is $1,500 then enter $750 for each of you where asked how much you each received.