Amish & Child Tax Credit

[gfizer]

We have a large Amish community in our area.  They have never taken the EITC or refundable child tax credit and returned all the stimulus money.  They would however allow the non-refundable child tax credit to offset tax liability.  This year many of them received the monthly advanced child tax credit.  Some opted out after the first payment but many of them just simply didn't cash the checks.  Now it's time to file their tax returns and some of them are owing because they've already received the advanced checks which are sitting uncashed or in some cases have been returned or destroyed.  Still others are showing they are due a refund because now all of the CTC is refundable if it exceeds their liability.   Has anyone else dealt with these issues and how are you handling it?  I will try to get the ones that have held checks to cash them to apply toward their tax liability but as far as refunds go, do I override the amount of advanced credit received to make it zero out so they are only taking the credit up to the amount of the tax liability or let the refunds come in and have them return the checks to the IRS?  

[kathyc2]

You could not claim all the kids to make it close.  Then they can write a check to reduce debt held by public for any refundable amount left.

I wouldn't override as that may trigger a math correction on IRS side. 

 

[Pacun]

I have not dealt with your situation because all my clients want $14K refunds from the IRS. 

Yes, as long as you enter the children correctly, the IRS will adjust the refunds. 

So, let's say you have a client with three children and $2,000 of withholding and a salary is $20K, you are requesting $2,000 refund and that's it? How about someone with $70K income, 10K withholding and 5 kids, are getting $10K refund and overriding the other entries? Preparing a return to make sure  you only get a refund equal or less than what was withheld is very, very hard.