couple filed a 2020 return jointly and received the advanced child tax credit. Each spouse received a letter 6419 with 50% of the advanced credit. In 2021 filing status will be married filing separate. How is the advance credit reported? All on the sp

[JW2]

I have two letters 6419, one for each taxpayer.  2021 filing status will be married /separate.  One child, how is the advanced credit reported, all with the taxpayer claiming the child or the amount reported on the letter for each taxpayer

[sjrcpa]

For each return you enter the amount they received.

[JW2]

That would mean the parent claiming the child would get an extra $750.  No pay back required for spouse.

[michele]

I believe there may be a bayback

[qbteachmt]

Payback depends on a number of qualifying/exclusion factors. Just work through the forms.

[mj46]

I have the same situation.  The married filing joint vs married filing  separate comparison resulted in the parent claiming the dependents getting that extra amount that the spouse already received.  It seems to me that something is not right with that.  Every married couple could change their filing status to MFS and receive extra child tax credit that they are not really entitled to.  I think it will be a problem that the IRS will catch on to.  Any more thoughts on this?  

[sjrcpa]

It's an unintended consequence.

In many cases MFS results in more tax so consider that.

[Shedid]

I am having this same issue. The MFJ vs. MFS comparison is showing a tax savings due to this issue. I have MFS vs MFJ comparison and living together (in a community property state) boxes check.  Also, Lacerte is not cutting the Child Tax Credit in half on the taxpayer who has the child on his MFS return.  On the Form 8812, it is giving the MFS taxpayer the full $3600 for the child who is under age 6.  Shouldn't it be half that, $1800?  It still states in Pub 17  for 2021 that the CTC for MFS is half.  Unless I missed something? 

[JW2]

Pub 17 and the instructions for 8812 state that 8812 instructions are the single source for figuring the child tax credit.  Form 8812 and instructions do not mention MFS.

[qbteachmt]

Here are IRS resources, FAQ, and guidance:
https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-f...

https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021

Repayment protection (in Sched 8812):
https://www.irs.gov/instructions/i1040s8#en_US_2021_publink100077789

The third Stimulus payout, which started in Jan 2021, has different eligibility rules than EIP#1 and #2, as to dependents. This payout was also a projection, using 2019 or 2020 tax returns, then reconciled against Actuals on the 2021 tax return. Stimulus info can be found at these links:

https://www.irs.gov/payments/view-your-tax-account

https://www.irs.gov/coronavirus/economic-impact-payment-information-center

https://www.taxpayeradvocate.irs.gov/covid-19-home/3rd-eip-and-2021-rrc/

Good luck.

[Shedid]

Thanks, I appreciate all this info.  I did check all of this out before coming to this site. The MFS spouse who Lacerte has as NOT claiming the child is having to pay back the $900 Adv CTC, but then the MFS taxpayer who is claiming the child is getting her half (again) AND and an additional $1800 "Additional Child Tax Credit" and the $700 Recov Rebate for the spouse's half of the child's Recov Rebate (that the spouse did indeed receive, but doesn't have to pay back.)

Form 8812 instructions are silent as to whether the credit gets halved for MFS. And yes I do know that even though 2021 Pub 17 says to halve the credit for MFS that we are supposed to look to the 8812 to calculate the credit. (The 2020 Form 8812 instructions also do not state anything about halving the credit.)

It just seems like it is a way to game the system. Hmm.

[Shedid]

Yep, I realize that the 8812 is to be instruction source and that it is silent about MFS.  The 2020 Form 8812 is also silent about MFS. 

[rbynaker]

---

@Shedid wrote:

It still states in Pub 17  for 2021 that the CTC for MFS is half.

---

In which page/chapter/section are you seeing this?  I looked starting on page 107 in section 14 under Child Tax Credit and did not see any reference to MFS.

https://www.irs.gov/pub/irs-pdf/p17.pdf

[Shedid]

Starts on pg 23 of publication under Married Filing Separately, continues on pg 24. Specifically item #9 under Special Rules on page 24.

[rbynaker]

Thanks!  That doesn't say anything about the CTC being half for MFS.

It reads as follows:

9. The following credits and deductions are
reduced at income levels half of those for
a joint return:
a. The child tax credit and the credit for
other dependents

See the instructions for 8812, in particular the Line 5 Wks on page 4:

https://www.irs.gov/pub/irs-pdf/i1040s8.pdf

Line 8 of the worksheet shows the income levels at which the CTC begins to be reduced.  For MFJ that's $150K, for MFS that's $75K.  The CTC is reduced at income levels half of those for a joint return.  The base credit amount of $3,000 / $3,600 is the same, regardless of filing status.

Rick

[Shedid]

Yes, yes, yes! Thank you. And I knew that, dah.. it's amazing what my brain forgets or gets jumbled when I've been researching something way too long. 

And I also see Lacerte did NOT calculate the repayment protection correctly or at all for the nonclaiming spouse. She would not have to pay the $900 back (based on my calcs.  Their split income is only around $47,000 each.)  Of course, I can't tell what Lacerte did because when I made a copy of the joint return and split it, it only split off his and made another copy of the joint return instead of also splitting off hers... which is whole 'nother issue.

[qbteachmt]

Are you signed up for IRS e-newsletters to your email? This one just came in:

https://www.irs.gov/newsroom/tips-for-parents-who-share-custody-or-alternate-tax-benefits