 Income tax 2021-2022, part 1A, child tax credit and credit for other dependents, all filers. Get ready to get refunds to the max diving into income tax 2021-2022. Most of this information can be found in the Schedule 8812 tax year 2021 instructions on the IRS website at irs.gov, irs.gov, income tax formula, we're down here in the credit area. Both deductions and credits are good for taxes, but if you had a dollar of credit versus a dollar of deduction, the credit would basically be better because you'd get the full value of that dollar in tax benefit as opposed to a deduction which would just simply be reducing the taxable income and then the tax would be calculated upon it. Also note that the credits have two primary categories that we can group things into, those being non-refundable credits and refundable credits. The non-refundable credits won't bring the tax liability below zero. The refundable credits could possibly bring the tax liabilities below zero at that point, not really having a refund, although it might still be called a refund, but rather you'd have kind of like a benefit program at that point in time. Some credits might have a non-refundable and refundable portion to them. This is page two of the Form 1040. We're looking at 919, the non-refundable child tax credit or credit for other dependents from Schedule 8812, Line 28, refundable child tax credit or additional child tax credit from Schedule 8812. So now we're considering the items on Schedule 8812. We're looking at Line 4a. So we're going to add the number of boxes checked under the child tax credit. So we're going to be looking at the child's, the qualify for the child tax credit, which we could see on page one of the Form 1040 in column four of the dependent sections on Form 1040 or 1040 SR and enter the result online for A. You cannot check both the child tax credit box and the credit for the other dependents box for the same person. So in other words, if we're looking at the first page of the Form 1040, we're down here with the dependents. If we checked off the child tax credit box, then we can jump on over to the Form 8812 and we're looking at Part 1a of the Schedule 8812. We're looking at 4a, number of qualified children under age 18 with the requested social security number. B, number of children included online for A who were under age six at the end of 2021. So remember that we have that two-tier kind of thing that we get a larger amount of the credit if under the six and then you've got up to the 18 with regards to the calculation being reflected as we put the information into the forms. So Line 2b and a number of children from Line 4a that were under age six at the end of 2021 on Line 4b. Example, let's say you have three qualified children who were ages 15, 10, and 5 at the end of 2021. On Line 4a, you enter three for the three children that are qualifying children and because they're all below 18. And on Line 4b, you would enter one. So in that case, so in that case, you would have then on page one, you would have the three dependents, but possibly and then you possibly would have the child tax credit here, but there's two tiers of the child tax credits. So then when you go over to this page, we would have possibly three up in 4a, but then I believe only one was under age age six. Obviously the tax software would help us out with the calculations of these as we enter the data into the system as well. So Line 5, if Line 4a is more than zero, enter the amount from the Line 5 worksheet, otherwise enter zero. So Line 5 has this worksheet here, which we might go into more detail in a future presentation. Software is often helpful to basically calculate this worksheet. So let's take a quick look at it here. So you've got the calculation up top. Notice that there's a phase out that's being put in place here because down here you can see enter the amount shown below for filing status, married filing joint or qualified widow or the 150,000 head of household 112,000, all others 75. So we've got that 75 here. And then it says subtract line eight from the schedule 8812 line three, which was basically the AGI of the 100,000. And that's why we're getting this 25,000, which is causing basically a reduction. So these are basically the thresholds that you'll start to see reductions as they do the phase out as income goes up because in this particular return, we've got the income or AGI pulling in on line one, which is coming from you can see in the 1040 the 100,000 adjusted gross income on line 11. So that's the general the general idea of it. Here's the worksheet that you could find in the instructions to the form 8812. And you could reconstruct it, we might put it together in an Excel worksheet just to examine it a bit more closely. But you can find that in the instruction software, of course, helps with the calculations with the phase outs and so on. But you want to have an idea of the phase outs as the income goes up, so that you can explain that to people, both in terms of why the calculation did what it did. And so you could reconstruct it and try to project into the future, what's going to happen next year for planning, although planning becomes difficult with this kind of area because you know, there could be temporary changes to these kind of this type of law because it was severely changed due to this economic circumstances. So line number six, add the number of boxes checked under credit for other dependents in column four of the dependent section on form 1040 or 1040 SR and enter the result on line number six. You cannot check both the child tax credit box and the credit for other dependents box for the same person. So now we're looking line six, the number of other dependents. So if you were looking at the form 1040, and you had someone here as a dependent, then you would have the checked boxes on the other side. And you can't have, of course, both of these chop boxes checked is the general idea there. Line 13 box a check box a if you or your spouse if filing jointly had a principal place abode in the United States for more than half of 2021. This means your main home was in the 50 States or the District of Columbia for more than half of 2021. So that would be generally most people claiming the credit in there or that would be the easiest kind of circumstances as well for main home for main home can be any location where you regularly live your main home maybe your house apartment mobile home shelter temporary lodging or other location and doesn't need to be the same physical location throughout the tax year. So now on line 13 most people will basically have this one checked off which would mean you're under the general rules typically. So check all the boxes that apply to you your spouse if married filing jointly a check here if you or your spouse if filing married jointly had a principal place of abode in the United States for more than half of 2021. You don't need a permanent address see box be later if you were a bona fide resident of Puerto Rico in 2021. So we'll talk more about that in a second. If you are a temporarily away from your main home because of illness education business or vacation you are generally treated as living in your main home military personnel station outside the United States US military personnel station outside the United States on extent extended active duty are considered to have a main home in the United States for purposes of claiming a child tax credit. So we got line 13 be now so check box be if you or your spouse if filing jointly were a bona fide resident of Puerto Rico generally you were a bona fide resident of Puerto Rico. If during 2021 you met the President's test did not have a tax home outside of Puerto Rico and did not have a closer connection to the United States or to a foreign country then to Puerto Rico. So then we'd be checking off box be so it says check here if you or your spouse if married filing jointly were a bona fide resident of Puerto Rico and then you could have a situation where you wouldn't be checking either of those boxes a or b. And so we have those three kind of scenarios that could take place for more information on bona fide residents you can see publication 570 tax guide for individuals with income from US possessions. And if you check either box a or b then go to the instructions for part one be if you cannot check either box a or b then you go to the instructions for part C. So we got then we're going to go to the next part will either be this part one be here or then we'd be going to part one C would be the general next steps and then the instructions would guide us from that basically kind of fork in the road.