2023 Child Tax Credit shifted to non-refundable.

[TaxmannEA]

A client came in with a CP-12 showing a reduction in their refund of $3200. I was able to find out that the IRS shifted the 3200 of refundable credit to the non-refundable line. As the client had a substantial solar credit that reduced the tax to -0-, it caused the reduction. I cannot for the life of me determine what the reason was for the shift. The notice says that there was an error in the computation, but I can't see any error. The TP's income was well below the $400,000 limit fir MFJ. Has anyone else seen one of these?

[Lee B]

You definitely have a mystery on your hands. All you and your client can do is call.

A "Record of Account Transcript" might be helpful.

[jklcpa]

Did the program include the worksheet for the General limitation on tax credits and the 2 worksheets (A & B ) for the limitations related to the form 8812?  If so, go into the program and make sure that those were calculated correctly when the return was submitted, and that the return submitted matches what you believe are the current correct calculations. In other words, make sure that there wasn't a program update of the calculations after filing this return to verify that you are looking at the return that was actually filed.

I once had changes that luckily didn't affect the final outcome of the return, and when I opened the return within the program it didn't match the pdf of what was filed for the client. 

[Pacun]

The 2K credit becomes non-refundable when tax liability is higher, correct? If something other credits were denied, your 2K credit could be eaten by the liability.