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Generating the Additional Child Tax Credit on Form 8812 in ProConnect

SOLVEDby IntuitProConnect Tax38Updated July 12, 2022

Intuit ProConnect will automatically compute the Additional Child Tax Credit (CTC) based on your entries throughout the return. 

For tax year 2021 the following changes have been made to the Child Tax Credit:

  • The Child Tax Credit has been expanded to apply to qualifying children who have not yet reached age 18 by the end of 2021.
  • The initial amount of the Child Tax Credit is increased to $3,600 for each qualifying child who has not yet reached age 6 by the end of 2021 and $3,000 for each qualifying child who has not yet reached age 18 by the end of 2021.
  • If you meet certain residency requirements, the Child Tax Credit will be fully refundable even if you received no income.
  • See the IRS instructions for Form 8812 for phase-out and calculation information.

Advanced payments of the Child Tax Credit:

  • From July 2021 to December 2021, taxpayers may have received an advance payment of the Child Tax Credit equal to 50% of the IRS estimate of the Child Tax Credit.
  • The IRS used the tax year 2020 return to estimate the amount of the advances. If a 2020 return wasn't filed the 2019 return was used.
  • If you received advance Child Tax Credit payments during 2021 and the credits you figure using Schedule 8812 are less than what you received, you may owe an additional tax. See Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return for details.

The IRS has indicated recipients of the Advanced Child Tax Credit (ACTC) will need to compare the amount of payments received during 2021 with the amount of CTC claimed on their 2021 return. If the amounts don't match what the IRS has on record, this could result in a delay of refund. For more information, including a link to the IRS CTC portal, see IRS Updates and FAQs for 2021 CTC and ACTC Payments.

Entering advance child tax credit payments from Letter 6419

  1. The taxpayer should receive letter 6419 showing how much advance child tax credit payments they received.
  2. From the left side of the screen select Credits.
  3. Select Recovery Reb, CTC, EIC, Oth Credits.
  4. From the top sections select Child.
  5. Enter the information for the tax return.

Electing to use prior year earned income for tax year 2020:

For tax year 2020 returns, your client may elect to use their 2019 earned income to figure this credit if their earnings were greater in 2019 than in 2020. To make this election:

  1. Complete the return (wages, dependents, etc.) as you normally would.
  2. On the left-side menu, select Credits.
  3. Click on the Recovery Rebate, EIC, Residential Energy, Oth Credits screen.
  4. Select the EIC section at the top of the input.
  5. Enter a 1 or 3 in the field labeled Elect to use 2019 earned income and nontaxable combat pay for: 1=EIC and additional child tax credit, 2=EIC only, 3=additional child tax credit only.
  6. Enter the amount of 2019 Earned income (not including nontaxable combat pay).
  7. Enter any 2019 Nontaxable combat pay, if applicable.

Make sure to check the return with and without this election to compare which option is more advantageous to your client. Since the Additional Child Tax Credit calculation is so complex, electing to use prior year earned income may have no effect on the credit amount or may even lower the allowed credit.

To adjust the 8812 calculation:

  1. On the left-side menu, select Credits.
  2. Click on the Recovery Rebate, EIC, Residential Energy, Oth Credits screen.
  3. Select the Child section at the top of the input.
  4. Enter any adjustments needed in the fields labeled [Adjust] here.

Keep in mind:

  • The Child Tax Credit and additional Child Tax Credit can be overridden here, and the credit amount will flow directly to the appropriate line of Form 1040.
  • However, the IRS doesn't allow returns to be e-filed with overrides entered for CTC. Overrides will also suppress Form 8812 as the program assumes that the form has been manually completed elsewhere and will be physically attached to a paper-filed return.
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