I added a second dependent to my W4 and my federal withholding has decreased. Will this affect my eligibility for the Child Tax Credit on next years' return?

Forum|Forum|2 years ago
April 2, 2024
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I updated my W4 in February after having a second child and my federal tax withholding decreased by nearly $300 per paycheck. This is great, but will it have any effect on receiving the child tax credit as part of my tax refund next year?

TurboTax Online

xmasbaby0

Employee

No---that does not affect your eligibility for the child tax credit. It only affects the amount of tax your employer will withhold from your paychecks.

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Vanessa A

No. The amount you have withheld from your wages does not affect your eligibility for the Child Tax Credit. Although it will not affect the Child Tax Credit, you may still end up with a lower refund or possibly owing taxes, depending on how much they are withholding compared to how much you earn. If this is your second dependent, it would not change your filing status. Also, the fact that a Child Tax Credit is at most $2,000 means, they are not withholding that much more.

There are not dependent exemptions anymore, so even if you only get paid every other week, a $7,800 drop seems excessive for a change in your withholdings because you added a second dependent. If you didn't already have a dependent and you are single, then this change likely reflects the change from single to Head of Household.

You may want to contact your employer to find out why they changed so much.

Also, look at lines 16, 24 and 34. Then subtract $7,800 (if paid biweekly) to see where that leaves you for next year. Add in $2,000 for the Child Tax Credit (IF you definitely qualify) and if your wages stay relatively the same and you have no other income sources, this will give you a rough idea of your tax refund or amount due next year when considering your extra $300 per pay.

Also, if you are married, your spouses wages should be considered when you adjust your W-4.

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christmar15Author

Thank you! I used the IRS withholding estimator, which seems to be telling me that if I kept the current lower withholding (which would give me an additional $6,720/ year in my take home pay) that I would not get a refund, and instead would owe $145 when I file for 2024. Does that sound about right?

JohnB5677

I'm sure I don't have the whole story, but I'd like you to clarify a couple of things.

Did the additional child trigger some additional Credits?
Where did you get the $6,720 that you weren't going to pay in taxes?
Did you have over $10,000 withheld this year?
How much was your tax bill for 2023?
This shows you've paid almost half of the taxes you'll pay this year in about 12 weeks. Is that true?

Please contact us again with any additional questions or to provide some additional details.

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