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Refundable Child Tax Credit

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Level 2

Anyone can help with this, please?

what is the link between the dividends income and ACTC refundable? A client has five kids under 17 earning 125,000 as wages. He gets a full $7k refundable CTC however as soon as I enter his dividend of $50k, the ACTC starts going down.

 

Thank you in advance. 

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7 Replies 7
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Level 15
Level 15
Does the form 8812 show the computation?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 2

There is 8812 but does not show dividend income there. 

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Level 15
Level 15

Ahhh...I see what you mean.  I just tested it on a return and added dividend income and it started wiping out the ACTC and completely eliminated at at a certain point. 

Im using ProSeries but Im not seeing a worksheet or schedule anywhere that really walks through the computation.

Theres got to be a worksheet in the actual 1040 instructions somewhere.....Im not going digging though, sorry!


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 2

Exactly, this is what I mean. I think if you add $50k dividend the CTC got reduce quite a lot. 

I'll look into the worksheet. 

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Level 12

Is MAGI over the income limits ($200,000/$400,000)?

https://www.irs.gov/pub/irs-pdf/p972.pdf#page=4

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Level 2

No that’s the thing AGI is way below the threshold.  It is 175K

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Level 15
Level 15

Does the regular CTC change as the ACTC changes? 

Ive been tinkering around with my daughters return, shes only got 2 kids and she gets 2342 in CTC and 1658 in ACTC (total of 4000) 

When I add 50k in dividends, her CTC goes up to 4000 and her ACTC goes down to zero.

So if your CTC is maxed out, you wont get an ACTC.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪