To reconcile your advance Child Tax Credit (CTC) payments and determine the amount of CTC you can properly claim, you need to follow these steps:
- Reconciliation Requirement:
If you received advance Child Tax Credit payments during 2023, you must reconcile the total advance payments with the Child Tax Credit you are eligible to claim on your 2023 tax return. This reconciliation ensures that the advance payments you received align with the actual credit you are entitled to based on your 2023 income and family situation. - Schedule 8812:
To perform this reconciliation, you will need to complete Part 1 of Schedule 8812. This part of the form is specifically designed to help you determine the correct amount of Child Tax Credit you can claim after accounting for any advance payments received. - Steps to Complete Schedule 8812:
- Determine Eligibility: Ensure that each child you are claiming meets the qualifying criteria for the Child Tax Credit. The child must be your dependent, under age 17 at the end of 2023, and meet other conditions outlined in the tax instructions.
- Enter Advance Payments: On Schedule 8812, you will enter the total amount of advance Child Tax Credit payments you received during 2023.
- Calculate the Credit: Follow the instructions on Schedule 8812 to calculate the total Child Tax Credit you are eligible for based on your 2023 income and the number of qualifying children.
- Reconcile the Amounts: The form will guide you through reconciling the advance payments with the total credit. If the advance payments exceed the credit you are eligible for, you may need to repay the excess. Conversely, if the advance payments are less than the credit, you can claim the difference on your tax return.
- Additional Considerations:
- Income Limits: Be aware that the Child Tax Credit may be reduced if your modified adjusted gross income (AGI) exceeds certain thresholds ($400,000 for married filing jointly and $200,000 for all other filing statuses).
- Form 8862: If your Child Tax Credit was previously denied or reduced for reasons other than a math or clerical error, you must attach Form 8862 to your tax return to claim the credit again, unless an exception applies.
By carefully following these steps and completing Schedule 8812, you can accurately reconcile your advance Child Tax Credit payments and determine the correct amount of Child Tax Credit to claim on your 2023 tax return.
Sources:
Instructions for Form 1040-NR (2023)
1040 (2023)
2023 Instructions for Schedule 8812 (2023)
Instructions for Form 1040-SS (2023)
Instructions for Form 8867 (11/2023)
Instructions for Form 1045 (2023)
Instructions for Form 8862 (12/2023)
