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Generating the Additional Child Tax Credit on Form 8812 in ProConnect Tax

by ProConnect Tax Online Updated 7 months ago

Intuit ProConnect will automatically compute the Additional Child Tax Credit (CTC) based on your entries throughout the return. 

What's new for 2022 returns?

  • The increased age allowance for qualifying children ended. A child must be under age 17 at the end of 2022 to be considered a qualifying child.
  • Enhanced credits for children under age 6 and under age 18 expired. The maximum credit is $2,000 for each qualifying child.
  • The maximum amount of Advanced Child Tax Credit for each child is $1,500.
  • Bona fide residents of Puerto Rico are no longer required to have three or more qualifying children in order to claim the ACTC.
  • See the IRS instructions for Form 8812 for phase-out and calculation information.

To adjust the 8812 calculation:

  1. On the left-side menu, select Credits.
  2. Click on the Recovery Rebate, EIC, Residential Energy, Oth Credits screen.
  3. Select the Child section at the top of the input.
  4. Enter any adjustments needed in the fields labeled [Adjust] here.

Keep in mind:

  • The Child Tax Credit and additional Child Tax Credit can be overridden here, and the credit amount will flow directly to the appropriate line of Form 1040.
  • However, the IRS doesn't allow returns to be e-filed with overrides entered for CTC. Overrides will also suppress Form 8812 as the program assumes that the form has been manually completed elsewhere and will be physically attached to a paper-filed return.
  • For tax year 2021 only:

    • The Child Tax Credit was expanded to apply to qualifying children who hadn't yet reached age 18 by the end of 2021.
    • The initial amount of the Child Tax Credit was increased to $3,600 for each qualifying child under age 6 at the end of 2021 and $3,000 for each qualifying child under age 18 by the end of 2021.
    • If you met certain residency requirements, the Child Tax Credit could be fully refundable, even if you received no income.
    • See the IRS instructions for Form 8812 for phase-out and calculation information.

    Advanced payments

    From July 2021 to December 2021, taxpayers may have received an advance payment of the Child Tax Credit equal to 50% of the IRS estimate of the Child Tax Credit.

    2021 Returns only: Entering advance child tax credit payments from Letter 6419

    1. The taxpayer should receive letter 6419 showing how much advance child tax credit payments they received.
    2. From the left side of the screen select Credits.
    3. Select Recovery Reb, CTC, EIC, Oth Credits.
    4. From the top sections select Child.
    5. Enter the information for the tax return.

    Electing to use prior year earned income for tax year 2020:

    For tax year 2020 returns, your client may elect to use their 2019 earned income to figure this credit if their earnings were greater in 2019 than in 2020. To make this election:

    1. Complete the return (wages, dependents, etc.) as you normally would.
    2. On the left-side menu, select Credits.
    3. Click on the Recovery Rebate, EIC, Residential Energy, Oth Credits screen.
    4. Select the EIC section at the top of the input.
    5. Enter a 1 or 3 in the field labeled Elect to use 2019 earned income and nontaxable combat pay for: 1=EIC and additional child tax credit, 2=EIC only, 3=additional child tax credit only.
    6. Enter the amount of 2019 Earned income (not including nontaxable combat pay).
    7. Enter any 2019 Nontaxable combat pay, if applicable.

    Make sure to check the return with and without this election to compare which option is more advantageous to your client. Since the Additional Child Tax Credit calculation is so complex, electing to use prior year earned income may have no effect on the credit amount or may even lower the allowed credit.

    ProConnect Tax

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