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Author Topic: Enhanced Child Tax Credit  (Read 9816 times)

Offline TimT

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Re: Enhanced Child Tax Credit
« Reply #100 on: July 15, 2021, 10:38:10 AM »
I'm receiving countless reports of people who are either:
A) missing payments for a few of their children
B) Received $50 less than expected (and don't have a 5 year old turning 6 before year end)
Whats the reason for such a mess up ?

Offline AsherO

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Re: Enhanced Child Tax Credit
« Reply #101 on: July 15, 2021, 10:39:48 AM »
Whats the reason for such a mess up ?

Lousy software architects/developers at the IRS (policies/procedures might be a factor here too, where they err on the side of caution)

Online Euclid

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Re: Enhanced Child Tax Credit
« Reply #102 on: July 15, 2021, 10:42:50 AM »
No.
Very strange - this calculator doesn't make a linear jump from 2 kids to 3 kids:
2 kids: $2000 * 2 = $4000
3 kids: $3775 * 2 = $7550 <- instead of $6000 like i'd expect





Online nafnaf12

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Re: Enhanced Child Tax Credit
« Reply #103 on: July 15, 2021, 10:44:22 AM »
Haven't filed for 2020 yet (got an extension)
Anyway to claim this now? Child born in 2020
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Offline AsherO

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Re: Enhanced Child Tax Credit
« Reply #104 on: July 15, 2021, 10:46:46 AM »
Haven't filed for 2020 yet (got an extension)
Anyway to claim this now? Child born in 2020

No way to add a child in the portal yet. If someone had children on their 2019 return they should get based on that.

Once you file 2021 you’ll get the $$ anyway, the only difference is whether you’ll get it in advance via the portal, or as a credit when you file ‘21 taxes.

Online cgr

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Re: Enhanced Child Tax Credit
« Reply #105 on: July 15, 2021, 10:47:05 AM »
Haven't filed for 2020 yet (got an extension)
Anyway to claim this now? Child born in 2020
It'll be based on your 2019 return.
Filers can't add additional children (yet?).

Any over/underpayments will be reconciled on the 2021 tax return.

Offline yelped

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Re: Enhanced Child Tax Credit
« Reply #106 on: July 15, 2021, 10:52:24 AM »
2 children turning less than 6 at the end of 2021 and one more than 6 would be $850/month?

Offline AsherO

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Re: Enhanced Child Tax Credit
« Reply #107 on: July 15, 2021, 10:52:54 AM »
It'll be based on your 2019 return.
Filers can't add additional children (yet?).

Any over/underpayments will be reconciled on the 2021 tax return.

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Offline AsherO

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Re: Enhanced Child Tax Credit
« Reply #108 on: July 15, 2021, 10:53:33 AM »
2 children turning less than 6 at the end of 2021 and one more than 6 would be $850/month?

Sounds right.

Offline TimT

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Re: Enhanced Child Tax Credit
« Reply #109 on: July 15, 2021, 10:53:49 AM »
So people are going to have to wait to file these mistakes on the 2021 return which won’t arrive till sometime in 2023.

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Re: Enhanced Child Tax Credit
« Reply #110 on: July 15, 2021, 10:59:29 AM »
Very strange - this calculator doesn't make a linear jump from 2 kids to 3 kids:
2 kids: $2000 * 2 = $4000
3 kids: $3775 * 2 = $7550 <- instead of $6000 like i'd expect
I don't understand why they're issuing advance payments to anyone that earned over $170k to begin with. This is going to cause so many headaches at year end for those with overpayments.

In either case I suggest you check the IRS calculator here: https://www.irs.gov/credits-deductions/advance-child-tax-credit-eligibility-assistant

Online Euclid

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Re: Enhanced Child Tax Credit
« Reply #111 on: July 15, 2021, 11:01:35 AM »
I don't understand why they're issuing advance payments to anyone that earned over $170k to begin with. This is going to cause so many headaches at year end for those with overpayments.

In either case I suggest you check the IRS calculator here: https://www.irs.gov/credits-deductions/advance-child-tax-credit-eligibility-assistant
So you'd advise anyone who makes >$170k to opt out?

Online cgr

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Re: Enhanced Child Tax Credit
« Reply #112 on: July 15, 2021, 11:10:01 AM »
So you'd advise anyone who makes >$170k to opt out?
The $2k base credit is availble to couples earning less than $400k, and ideally (assuming no major overpayments) you don't get more than $2k per child in advance payments ($1,500-$1,800), so no, I don't see opting out as the go-to option for everyone in this bracket.
That being said, if you think you'll owe taxes at year end it might make sense to opt out, or at least put the money aside in savings. It's no fun being hit with a tax bill and not having the credits to offset it.

Online cgr

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Re: Enhanced Child Tax Credit
« Reply #113 on: July 15, 2021, 11:27:20 AM »


Not sure what to make of footnote [2], the last sentence. Anyone care to shed some light?
It's not mentioned in the IRS' guidance that I've seen.

Offline Jack out of the box

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Re: Enhanced Child Tax Credit
« Reply #114 on: July 15, 2021, 11:39:01 AM »
For children 0-5: Get $300 per month in July-Dec, and $1,800 when you file 2021 taxes

For children 6-17: Get $250 and $1,500.

Dependents ages 18-24: Get $0 now and $500 when you file.

All of these are subject to phase-out limits based on income. The phase-out formula is not straightforward- for married joint filers it starts to drop by $50 per $1000 in income over the 150,000 threshold, but it is not completely phased out until you earn $500,000.
$500 ODC became refundable?

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Re: Enhanced Child Tax Credit
« Reply #115 on: July 15, 2021, 11:40:52 AM »
$500 ODC became refundable?

.

...plus any amount of non-refundable $500 credit for other dependents...

Online Euclid

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Re: Enhanced Child Tax Credit
« Reply #116 on: July 15, 2021, 11:57:23 AM »
Not sure what to make of footnote [2], the last sentence. Anyone care to shed some light?
It's not mentioned in the IRS' guidance that I've seen.
All the online calculators seem to be doing this. This is another example: https://www.washingtonpost.com/business/interactive/2021/child-tax-credit-calculator/
2 kids - regular CTC
3 kids - enhanced CTC
(for a married, $200k AGI)

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Re: Enhanced Child Tax Credit
« Reply #117 on: July 15, 2021, 12:56:42 PM »
I don't understand why they're issuing advance payments to anyone that earned over $170k to begin with. This is going to cause so many headaches at year end for those with overpayments.

In either case I suggest you check the IRS calculator here: https://www.irs.gov/credits-deductions/advance-child-tax-credit-eligibility-assistant
Just checked the math and the enhanced phases out at $180k for couples with children 6-17.
Not sure why news sites are touting it as a total phaseout of the enhanced portion at $170k.

Math:
$180k-$150k= $30k
$30k/$1k= 30
30*$50= $1,500

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Re: Enhanced Child Tax Credit
« Reply #118 on: July 15, 2021, 12:58:15 PM »
Just checked the math and the enhanced phases out at $180k for couples with children 6-17.
Not sure why news sites are touting it as a total phaseout of the enhanced portion at $170k.

Math:
$180k-$150k= $30k
$30k/$1k= 30
30*$50= $1,500

Isn't the enhanced portion only $1000 for kids over 6?
Failing at maintaining Lurker status.

Online cgr

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Re: Enhanced Child Tax Credit
« Reply #119 on: July 15, 2021, 01:13:46 PM »
Isn't the enhanced portion only $1000 for kids over 6?
This is actually a bigger question.
Was the CTC changed entirely with different amounts, phaseouts, and advance payments? Or was it only changed for filers earning below the threshold?

CTC Changed for all:
CTC is fully refundable for all that are eligible, even if they're not eligible for the full $3k/$2k. This means that a real overpayment isn't possible for filers earning under $400k (unless you're getting payments for children over 17) since the advance portion always equals less than $2k. This fits with what we're seeing, that earners above $180k are receiving some advance payments.

CTC Changed for threshold filers only:
If this is the case, then the increase is $1k/$1.6k (from $2k to $3k/$3.6k) plus these income brackets qualify for advance payments of $1.5/$1.8k. In this scenario there should be no advance payments for those with income above $170k since at that point they cease to qualify for the enhanced/refundable CTC.

I would say it's the first, since we're seeing those with income above $170k receiving advance payments. Still not sure why news sites would tout a total phaseout for earners above $170k though.