Issues with the Child Tax Credit Advances

#26
#26
NorthDallas40 said:
I believe his point on a smaller return in April is valid however. And remember the absolutely stupid screaming we heard out of LG et al that the tax refund was lower?
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It will be at most a couple hundred dollars difference in the child credit
 
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#27
#27
NorthDallas40 said:
The interest on a $500 max loan offsets the level of pissed off I would be to write them another check. Plus if you underestimate too much the bastards impose a penalty which equates to the interest they would have earned on your underrun of monthly withholding. So pick the balancing point you want to shoot for 🤷‍♂️
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I hear ya. But I ain't giving them one red cent for free. I am supposed to pay quarterly, but I can take that money and invest it and make up the penalty. I HATE writing them a check, but I hate the thought even more of letting have my money for free.
 
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#28
#28
Quit yer bitchin’ and gripin’ says Slo Jo. It’s a 700% increase on investment!


 
#33
#33
utvolpj said:
It will be at most a couple hundred dollars difference in the child credit
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"Crumbs" is the term you meant to use I believe. I am waiting anxiously for @Ernest T. Vol to weigh in on this, but I believe it will be more significant than that based on the fact that it is moved from credit to income. Just like what they did with the ChinaFlu inspired charitable deduction. It was a $300 tax credit this year from the bottom line, but in 2021 it is a $600 income deduction. In effect, it became absolutely worthless, but they sold it as being doubled.
 
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#34
#34
utvolpj said:
It will be at most a couple hundred dollars difference in the child credit
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How does that make sense? If the credit due at tax time is a constant and these families are getting hundreds more a month now how does that equate to “a couple of hundred difference” at tax time?
 
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#35
#35
SpaceCoastVol said:
"Crumbs" is the term you meant to use I believe. I am waiting anxiously for @Ernest T. Vol to weigh in on this, but I believe it will be more significant than that based on the fact that it is moved from credit to income. Just like what they did with the ChinaFlu inspired charitable deduction. It was a $300 tax credit this year from the bottom line, but in 2021 it is a $600 income deduction. In effect, it became absolutely worthless, but they sold it as being doubled.
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It's not taxable income. It's a prepaid credit
 
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#37
#37
NorthDallas40 said:
How does that make sense? If the credit die at tax time is a constant and these families are getting hundreds more a month now how does that equate to “a couple of hundred difference” at tax time?
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For example, the old credit was $2k and the new credit is $3600. They will pay the family $300 for 6mos for $1800 so the difference is $200 at tax time. Opt out and you get the $3600 credit at tax time
 
#38
#38
utvolpj said:
For example, the old credit was $2k and the new credit is $3600. They will pay the family $300 for 6mos for $1800 so the difference is $200 at tax time. Opt out and you get the $3600 credit at tax time
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Ok now I’m even more pissed off 🤬
 
#40
#40
SpaceCoastVol said:
Still going to reduce your refund, and there will be screaming about that. It will be glorious.
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If he’s right in the couple of posts above they basically increased the credit AND prepaid the credit. Like I said now I’m even more pissed off. Time for the welfare baby factories to start cranking out more credits!
 
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#42
#42
utvolpj said:
Why are people going to owe more money? There's very little difference between the tax return credit from last year to this. Unless you go over the income limits for 2021 there shouldn't be much of a change
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I owe $20k in taxes. I have 3 kids so I get $10k in credit or whatever. I dutifully fill out my W-4 at work with all my income info, the computer sees I have 3 kids, it adjusts my withholding to $10k so that plus my credits is zero or thereabouts at tax time.

I get $5k of the credit this year. When it comes tax time I still owe $20k but instead of being paid in $20k I'm paid in $15k due to my advances. As that's more than 10% deficient I run the risk of paying underpayment penalties for doing nothing wrong. To correct the issue I would need to go back in and adjust my W-4 to withhold more taxes to the extent of the advanced credit I received, which totally negates the credit. How many people are going to do that?
 
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#43
#43
DancingOutlaw said:
I owe $20k in taxes. I have 3 kids so I get $10k in credit or whatever. I dutifully fill out my W-4 at work with all my income info, the computer sees I have 3 kids, it adjusts my withholding to $10k so that plus my credits is zero or thereabouts at tax time.

I get $5k of the credit this year. When it comes tax time I still owe $20k but instead of being paid in $20k I'm paid in $15k due to my advances. As that's more than 10% deficient I run the risk of paying underpayment penalties for doing nothing wrong. To correct the issue I would need to go back in and adjust my W-4 to withhold more taxes to the extent of the advanced credit I received, which totally negates the credit. How many people are going to do that?
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Why would the credit drop to $5k if income is constant? They essentially doubled the credit and sent half to you in a check

Your first scenario would have been a credit for $6k if you have 3 kids. You'll still get very close to that plus the 6 checks
 
#44
#44
utvolpj said:
Why would the credit drop to $5k if income is constant? They essentially doubled the credit and sent half to you in a check

Your first scenario would have been a credit for $6k if you have 3 kids. You'll still get very close to that plus the 6 checks
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There has to be some sort of mechanism to account for the money they've already sent you. Let's say I owe $8k total and I have $10k in child credits and I withheld $0. That would show a refund of $2k. I've already received $5k in advanced credits. I get another $2k on top of that?
 
#45
#45
DancingOutlaw said:
There has to be some sort of mechanism to account for the money they've already sent you. Let's say I owe $8k total and I have $10k in child credits and I withheld $0. That would show a refund of $2k. I've already received $5k in advanced credits. I get another $2k on top of that?
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It's a prepaid credit in 6 monthly checks. It has little effect on your taxes if income remains constant

Yes it can still be refunded if you owe no taxes
 
#46
#46
utvolpj said:
It's not taxable income. It's a prepaid credit
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I am not sure that is correct in terms of execution though. Unless they add a line to show how much you received in this that has to be subtracted from your credit... which they very well could.

@Ernest T. Vol ... where are you?
 
#47
#47
SpaceCoastVol said:
I am not sure that is correct in terms of execution though. Unless they add a line to show how much you received in this that has to be subtracted from your credit... which they very well could.

@Ernest T. Vol ... where are you?
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It is subtracted but the credit for 2021 was increased so it's basically a wash
 
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