American Rescue Plan
Anthony Speziale – Tax Shop & Financial Center
Hello to all of you and here are your latest updates on your taxes from the $1.9 trillion new package!
This will address the further developments pertaining to your tax situation return.
Unemployment
On March 17th, Federal passed a bill to have the first $10,200 of unemployment not taxable for those households with a gross income under $150,000. Massachusetts agreed to some extent to forgive some of the unemployment but with stricter parameters using the US poverty tables for your size family.
Our tax software was updated and all of the returns post March 17th have been processed. If your result changed, we have notified you by either phone or email with a copy of the change sent to you.
If you didn’t hear from us, nothing changed.
Premium Tax Credit
That was the return adjustment made if you were on Obamacare indicated by the 1095-A form. Such adjustments were processed, and all return filings were done.
The Third Recovery Rebate (Stimulus) for 2021
Feds started advancing monies on March 17th and will continue to do so into May. This round advanced $1400 per household member but has stricter guidelines. Your adjusted gross income must be below certain levels in order to qualify for a payment: up to $75,000 if single, $112,500 as head of household or $150,000 if married and filing jointly. It phases out completely at $80,000 single, $120,000 for head of household and $160,000 for Married filing jointly.
Child Tax Credit – another 2021 benefit
Eligible parents or caregivers will receive a $3,600 tax credit for each child 5 and under, and a $3,000 credit for kids ages 6 to 17 for the 2021 tax year.
The new plan increases the amount and the age limit of eligible children, and also waives the $2,500 earning requirement for parents or caregivers, so that those not employed can still benefit.
Eligible parents and those with dependent children can now also get an advance on half of their 2021 credit in the form of monthly payments of $250 or $300 per child.
Tax credits are an amount that taxpayers can subtract directly from any taxes owed, and the child tax credit has traditionally given eligible parents a $2,000 annual credit for each child under 17 years old.
Those now eligible for the expanded tax credit include single-filers making up to $75,000 annually, heads of household making $112,500 annually and married couples filing jointly who make $150,000 annually.
After that income cutoff, the expanded credit begins to phase out in increments as income increases. Those making up to $200,000 remain eligible for the original $2,000 credit
NOTE:
As strongly urged by both the IRS and MA DOR, any returns processed prior to March 17th will be adjusted by the IRS and DOR and they will not accept amendments. It is to begin approximately the end of MAY..
We have NO knowledge over the timetable when the stimulus payments will be made. We can only tell you a best guesstimate of how much you will receive. This also holds true for the advanced child tax credits. We love to help but please, don’t ask us when you will receive the funds. Best way is to continue monitoring your progress thru the IRS website.
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