 Income tax 2021-2022, child tax credit Part 1c, filers who do not check a box online 13, non-refundable child tax credit, additional child tax credit, and the other dependent credit. Get ready to get refunds to the max, diving into income tax 2021-2022. Most of this information can be found on the Schedule 8812 Instructions Tax Year 2021 IRS website, irs.gov, irs.gov, income tax formula. We're in the credit area noting that both credits and deductions are good. But if you had a dollar credit versus a dollar deduction, the credit would basically be better because you generally get the full value of the dollar as opposed to a deduction where you're lowering the taxable income applying the tax then upon the taxable income. Also note that the credits can be generally thought of as two main groups, the non-refundable credits and the refundable credits. Non-refundable credits will not bring the tax liability below zero. The refundable credits may, and if the tax liability goes below zero, you would still get money, which would be like a refund, called a refund, but really not really a refund because it would be more like a benefit program at that point in time. Some credits might have both a refundable, a non-refundable and refundable portion to them. This is page two of the Form 1040 looking at line 19, the non-refundable child tax credit or credit for other dependents from Schedule 8812. This is line 28, the refundable child tax credit or additional child tax credit from Schedule 8812. So now we're continuing on with the instructions. We're looking at part 1c, just a quick recap. If we were to take a look at the form here, we're looked at part 1a. We get down to the question on line 13, check all the boxes that apply to you or your spouse if filing married filing jointly. A, check here if you or your spouse if filing married filing jointly had a principal place of abode in the United States. That would be most people. B, check here if you or your spouse if married filing jointly were a bona fide resident of Puerto Rico. If neither of these are checked, that's then when we're going to be moving as we are here, not to part 1b, but to part 1c in this case. So that's going to be kind of our starting point that we're looking at. And this would be the more unusual kind of starting point for most people. So part 1c, filers who do not check a box on line 13. So now we've got the nonrefundable child tax credit, the additional child tax credit and the other dependent credit. Only filers who do not check a box on line 13 should complete this part. So that would be most people would not unless you fall into that category. If you checked a box on line 13, you use part 1b instead. So line 15a, enter the amount from credit limit worksheet. So we looked at the credit limit worksheet in a prior presentation, complete the credit limit worksheet. A, you may be instructed to complete credit limit worksheet. B, just note if we jump on over to the tax software, we're in part 1c. Software can obviously help with the calculations. Here's the credit limit worksheet just in the software that you can take a look at to get an idea of it. We might reconstruct this one, but possibly not. We may reconstruct that prior worksheet we looked at in a prior presentation. But getting back to it, we're going to say then when completing the credit limit worksheet A, you may be instructed to complete credit limit worksheet B. If you meet certain conditions, obviously tax alters are hopeful to do those. Complete credit limit worksheet B only if you meet all of the following. You are completing part 1c of schedule 8812, which again, most people would not be because they would be completing. They would have checked off one of the boxes on box 13. You are claiming one or more of the following credits. A, mortgage interest credit form 8396. Adoption credit form 839. Residential energy efficiency property credit form 5695. Part 1 and D, district of Columbia, first time home buyer credit form 8859. Number 3, you are not filing form 2555. And number 4, line 4a of schedule 8812 is more than zero. Line 15c, if you completed part 2a through 2c, enter the amount from line 27, otherwise enter zero. So that's here on the working part 1c, we're line 15c. If you completed part 2a through 2c, enter the amounts here. We got zero in our calculator. So only complete parts 2a, 2b and 2c if you are completing part 1c and you meet the following. So that would be 1, you are not filing form 2555. Line 4a is more than zero and line 3, line 12 is more than line 15a. Line 15e, enter the aggregate amount of advanced child tax credit payments you received for 2021, as reported in box 1 on your letter 6419. So you can still get that letter that would be estimated the advance payments that you have gotten. So now we've calculated the credit for the current year. And we've got to get the advance, the letter that we got the advance payments from. If you didn't receive any advanced child tax credit payments for 2021, enter zero. So that's going to be here. We're going to take a look at that on 15e. So we can see here 15e. Generally, it would be like half because that would be the calculation that they're trying to go give you. And so then so you got the 3600 calculated up top. And then we've got the 1800 from we're saying from the letter that were the advance payments that then we received. Okay, so then married filing jointly. If you are married filing jointly, add the amount reported in box one on your letter 6419 and your spouse's letter 6419 and enter the total on line 15e. See example four, five and six earlier. So same kind of example with those reporting of the 6419 with the different circumstances, single and the married situations. If the amount on line 15e doesn't match the amount reported to you on your letter 6419 or the total amounts reported to you. And your spouse of filing jointly, the processing of your return will be delayed. So obviously those have to line up because the IRS has that information and if they don't, the IRS will have questions about it. Now notice just as a little bit of a difference of the calculation here. We talked about this earlier, but just to note that up here I didn't check off the box on the on 13 the box in part one and like line 13. And now if I go to page number two, we've got our calculation on part to see there is the 1800. And then if I pull over to the form 1040 and go to page two, you'll note that it's being reported up here in the non refundable child tax credit. And that's going to be one of kind of like the differences between this non refundable and kind of the additional payment that we kind of saw in the prior year. It's kind of following a bit more the rules in the in the prior year in that instance. So in other words, if I was to go back on over here just to look at the difference and say that I checked this box off on line 13. Let's check this box off then and say boom checking it off. Now we're back on over here in the form and we're filling out part one be again. And if I go back to the form 1040 and look at page number two, you could see that it's not being reported. Up here as the non refundable because it's all basically on the refundable side down here. So you got the same calculation but it's down here and that could be an issue. If you run into if you if it's not a refund that you're looking at but that your tax liability is going below zero. So let's take a quick look at that if I go back on over and say let's go back to the original circumstance and let's bring the income down. Let's bring the income down. So I brought the income down to 20,000 just to get an idea. So there's the 20,000 of the income going then to page two. You could see that I'm up here and the non refundable items and and I'm not getting the full amount of the credit because it's not going to take the liability that I'm going to have basically below zero. I'm not going to get like a refund past what I paid in in essence. Now if I was to go back on over however and say let's say now I check this box off again and I keep the income level the same but I check that box off. Then I'm going to check it off or I'm and so I'm going to go back on over uncheck it there which checks it here box 13 the normal condition for tax or 2021 for most people and then go back on over and now note that I'm getting this full benefit down here of the 1,800 and I'm basically getting you know now now money back even though even though I haven't paid any money in right that's what it means to basically be refundable and kind of the differences between checking off and not checking off that box on line 13. So it's actually a little bit more complex if you don't check it off but it's kind of similar to what it was before in the prior years and might be similar to what they go back to we'll see what happens in the following year.