- Let's say my tax liability for 2021 will be $8,000
- I have 2 eligible dependents resulting in $6,000 in child tax credits
- I'm eligible for $4,000 in other tax credits that are non-refundable
My understanding is that the child tax credits for 2021 will be fully refundable (as opposed to prior years where only part was refundable). When I file taxes for 2021, will tax credits be applied in a specific order? This other Q/A for 2019 taxes indicates that ordering doesn't matter. Does that still apply, or is there a change with the adjusted tax credits in 2021? Assume here that I opt out of the monthly payments in 2020 to use the full credit when I file for 2021.
Based on the scenario above, is my tax liability now $0 because the $6,000 is deducted first and the $4,000 is non-refundable. Or, is it -$2,000, resulting in receiving a check for $2,000 when I file?
Secondarily, if I opt to receive 1/2 of the child tax credit in 2020, does that change anything? Instead of having $10,000 in credits when I file, I would have $7,000 in credits (having already received $3,000 in monthly payments July-Dec). In that case, I would then owe $1,000?