Heads Up on form 8812 with 3 or more kids

[MN2V]

Latest form 8812 (version 22) still does not flow withholding tax

and medicare tax to line 7, even though the correct amount does

calculate. One unhappy Client will be getting a paper check for refund less

refundable addnl child credit because the numbers were missing.

Maybe it was something I did or didn't do, haven't heard back

from Tech support...

[MN2V]

OR the problem may be with the IRS in that 4 dependents are listed

but 3 qualify but are not top 3 listed...The more I look at the

form, I don't think there should be entries where some seem missing

and how do you tell a client $2000 will be delayed, and I am not

picking on him just because his PACKERS won the super bowl....

Has anyone else found the IRS more incompetent than usual this year?

[Pacun]

I was hoping to understand your point after someone replied to your post but no luck even after your autoreply. Are you talking about the additional child tax credit? If you are, you need to request it by clicking on the bunny. Clicking on the bunny will open up form 8812 and correctly calculate the refundable credit (the same way that you need to request EIC).

I efiled today a 1040 with 5 children. The first one was 17 and the other 4 were under 17. The refundable credit was calculated properly for the amount of $3800 on form 8812.

We discussed this about 4 years in this forum and we are careful when we see that the tax liability is lower than than amount of the credit.

[Tax Prep by Deb]

I've been having somewhat of a problem with this form as well. My problem isn't what the previous poster's problem was but it's still driving me nuts.

I have several clients who are going to school and receive grants that exceed their educational expenses. Therefore I include the excess on line 7 (worksheet where we are to put the excess scholarships, grants, that are not reported on W-2.

The worksheet within ATX has calculated the 8812 by taking the total income and deducting from it the scholarship/grant, thus figuring the credit based on W-2 income only (clients usually have very little earned income, therefore little or no additional credit.)

IRS refigures the credit based on the the whole amount, W-2 Income and taxable grant, thus boosting the additional child tax credit.

Incidently this same issue has been affecting the Making Work Pay Credit.

I believe ATX is correct, and IRS is wrong, but I don't know what to do about it.

Any thoughts!

Deb!

[kcjenkins]

Actually, in this case I think IRS is correct and ATX is wrong. Because excess grant money is deemed to be 'wages' that are exempt from payroll taxes, but still earned income, and therefor should count for both the tax credits.

[Tax Prep by Deb]

Actually, in this case I think IRS is correct and ATX is wrong. Because excess grant money is deemed to be 'wages' that are exempt from payroll taxes, but still earned income, and therefor should count for both the tax credits.

I would think so to, however when you look at the worksheet they give you, (I even looked at IRS own worksheet), it seems to indicate that the grant needs to come out.