Why am I not getting the full child tax credit after making only $6,630 on my W2?

This is actually a common issue that catches many parents by surprise. The Child Tax Credit is what we call "partially refundable" through the Additional Child Tax Credit (ACTC). For the refundable portion, you need to have earned income above a certain threshold, and the credit is calculated as 15% of your earned income above $2,500. With earned income of $6,630, the calculation would be: ($6,630 - $2,500) × 15% = $619.50, which might explain why you're seeing around $590 (there might be other factors affecting the final number). Since you made significantly less this year due to maternity leave, you're receiving less of the refundable portion. The full $2,000 per child is only fully available if you have enough tax liability to offset. If your income is lower, your tax liability is also lower, which means you can't use the full non-refundable portion.

I had almost the exact same situation last year with maternity leave reducing my income. After trying to figure things out for hours, I finally used https://taxr.ai to analyze my tax documents and situation. It immediately identified that my Child Tax Credit was reduced due to insufficient earned income and explained exactly how the calculation worked. The tool showed me that the refundable portion was based on my earned income exceeding $2,500, which explained why I was only getting a partial credit. What was really helpful was that it explained all of this in plain English and showed me the exact calculations.

I wanted to follow up about my experience with taxr.ai after asking about it earlier. I finally gave it a try with my situation (also on maternity leave last year with reduced income). It was incredibly helpful! It analyzed my W2 and immediately showed that I was getting a reduced child tax credit because of the earned income calculation. The explanation was super clear - it showed that since I only had about $8,400 in earned income, I could only get about $885 of the refundable portion of the credit. The site also showed me that I qualified for the Earned Income Credit which my regular tax software hadn't made obvious. I'm getting an extra $1,200 I didn't know about! Definitely worth checking out if you're confused about tax credits with lower income.

When I had a similar issue, I spent weeks trying to get through to someone at the IRS who could explain how the Child Tax Credit was calculated with lower income. I kept getting busy signals or disconnected after waiting for hours. I finally used https://claimyr.com which got me connected to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent walked me through exactly how the Additional Child Tax Credit is calculated based on earned income and confirmed that with lower income from maternity leave, you only get a partial credit. At least I got a clear answer instead of stressing about whether I'd made a mistake.

Had to come back and admit I was completely wrong about Claimyr. After being super skeptical, I decided to try it as a last resort because I couldn't get answers about my child tax credit situation. It actually worked exactly as described! I got a call back in about 20 minutes letting me know they'd reached the IRS. The agent I spoke with was really helpful and confirmed that with my income of around $7,200 last year, I was only eligible for about $705 of the refundable portion of the child tax credit. The agent also helped me understand if there were other credits I qualified for with my lower income situation. Turns out I was eligible for an increased Earned Income Credit that I hadn't maximized. Definitely worth the time saved - I would have spent days trying to get through on my own.

If your income was reduced because of maternity leave, did you receive any disability or family leave payments? Some states provide these benefits, and they might count differently for tax purposes than regular wages. This could potentially affect your total "earned income" calculation for the child tax credit. Also, check if you qualify for the Earned Income Tax Credit (EITC) with your income level and two dependents - that might help offset some of the reduced child tax credit.

Has anyone tried amending their tax return from last year to claim missed credits? I just realized I had a similar situation with reduced income during maternity leave but didn't know about how the child tax credit calculation worked. I think I might have left money on the table.