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Why am I getting the full Child Tax credit of $2,000 as a refund?

Forum|Forum|1 year ago
February 12, 2025
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I thought that this only reduced my taxes due?

Best answer by MayaD

So on Schedule 8812, line 27 it was blank. Line 14 was $2000 so this looks like the standard child tax credit. This lowered my taxes due from $7500 to $5500 resulting in a tax refund of $2500. I was under the impression that if I am getting a refund that I can't use that full $2000 but maybe I am just mistaken at how I am interpreting how to apply the child tax credit? Can you try to explain? Thanks

You can qualify for the full CTC credit even if you are receiving a refund.

Your tax liability is the amount on line 18. It is the total amount of taxes you are responsible for without consideration of what you have already paid in. The child tax credit can reduce your tax liability to $0. And if your withholdings and payments exceeded your tax liability, the difference is your tax refund.

CatinaT1

The Child Tax Credit can just reduce your tax, but the Additional Child Tax Credit is refundable up to 85%. You must have something else included in your refund.

You can check your tax summary to see what it is coming from:

Log in to your tax return at TurboTax.com.
Click on Tax Tools on the left side of the screen (you may need to click on Continue in the center first).
Click on Tools.
In the box that pops up in the center, click on View Tax Summary

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J

jake64Author

It says total credits: $2,000. I don't have any other credits. I'm concerned that is an error in TurboTax that I can't fix.

J

jake64Author

You can qualify for the full CTC credit even if you are receiving a refund.

Your tax liability is the amount on line 18. It is the total amount of taxes you are responsible for without consideration of what you have already paid in. The child tax credit can reduce your tax liability to $0. And if your withholdings and payments exceeded your tax liability, the difference is your tax refund.

Wow, thank you! I finally understand how this credit works. The way the rule reads (to me at least) is that I can't use it towards my refund...in other words since I am getting a $2500 refund I thought that meant I should only get $500 since $2000 of that is being increased by the CTC. Apparently I am wrong and that is a good thing in my case!