Schedule 8812 - Advanced Child Tax Credit - But Child Not on 2021 Return.

[Chowdahead]

This form or the calculation in ATX is not as straightforward as it could be, so I wanted a second opinion to ensure I am calculating it correctly.  https://www.irs.gov/pub/irs-pdf/f1040s8.pdf

If I check 13A, then I complete Part-1B.  If the individual received Advanced Child Tax Credits (ACTC) payments, I enter that total amount on Line 14f, in this case $1,800.  If the taxpayer doesn't have any dependents on their 2021 return, this will generate a repayment tax on Schedule III, which is expected.  However, a red error will then generate regarding Part III Line 30, asking for the number of qualifying children taken into account in determining the annual advance amount you received for 2021."

Initially I thought I should enter "1" here because that is what the payments were based on (1 child).  However, entering "1" on that line will wipe out the repayment tax for the ACTC and clear the error, and that seems wrong.  Entering in "0" on that line will reinstate the repayment and clear the error.

Is this correct and is the correct entry in this case "0"? 

Then I am assuming that if the taxpayer received ACTC payments for 2 dependents but is only claiming 1 on their 2021 return, they will only need to repay the ACTC on that dependent, correct? 

Food for through, The form doesn't ask to specify which child the ACTC is being repaid for so I can only imagine how the IRS will issue the entire CTC amount to the parent who actually files for the child, unless they assume it is the child who was left off as compared to the payments.  I'm going down a rabbit hole here... 

[Lion EA]

It doesn't matter which children were &/or are claimed. It only matters how many children were &/or are claimed.

Is it possible your client is low enough income that they have payment protection?

[Chowdahead]

I was under the impression that payment protection only came into play when the taxpayers income reduced the credit amount, not when the actual child was not on the 2021 return.  Otherwise the IRS would be issuing the credit for the same child twice, but to different filers, no?

[Lion EA]

Divorced couples, for instance, who alternate years will each claim a child, the same child -- and therefore one got the ACTC and the other the CTC. Same child.

Repayment Protection is for low income taxpayers who received the ACTC but have fewer or no children on their 2021 return and meet the income thresholds.

[Janitor Bob]

You will be able to apply the full repayment protection amount of $2,000 for each excess qualifying child if your modified adjusted gross income (AGI) is at or below the following amounts based on the filing status on your 2021 tax return:

$60,000 if you are married and filing a joint return or if filing as a qualifying widow or widower;

$50,000 if you are filing as head of household; and

$40,000 if you are a single filer or you are married and filing a separate return.