Advance Child Tax Credit Payments to Begin July 15, 2021
The American Rescue Plan, which was passed in March 2021, included a one-year expansion of the Child Tax Credit that increases the total credit available. Under the American Rescue Plan, it also allows the tax credit to be distributed in advance periodic payments.
However, the Advance Child Tax Credit is not another stimulus payment. Rather, qualifying families can receive 50% of the total credit in periodic payments starting on July 15, 2021 and ending in December 2021. The remaining amount of the credit will be available for qualifying taxpayers to claim when they file their 2021 taxes.
The maximum credit families can claim in 2021 is $3,600 for each child under the age of six and $3,000 for children between the ages of six and seventeen. This increases the prior tax credit, which was set at $2,000 for children under 17.
A single filer earning up to $75,000 will receive the full tax credit for each child under the age of 17. Joint filers earning up to $150,000 are also eligible to receive the full tax credit.
Single filers making more than the threshold, but up to $200,000, and joint filers making up to $400,000 are eligible to receive the old tax credit of $2,000.
Whether a taxpayer qualifies for the credit will be based on the filer’s 2020 tax return. However, if that return is not available the IRS will use the taxpayer’s 2019 tax return.
The IRS has opened up a portal to allow taxpayers to “opt out” of the Advance Child Tax payments. This is in large part due to the fact that most filers utilize the child tax credit as an offset of their tax liability.
President Biden’s Infrastructure Plan Sees New Hope With Breakthrough of Some Bipartisan Support
In March of 2021, President Biden introduced the American Jobs Plan, which met much resistance in a divided Congress in large part due to the price tag of the plan.
It appears, however, White House negotiators and key United States Senators may be closing in on a bipartisan infrastructure deal worth around $1.2 trillion. Key senators are scheduled to meet with President Biden and Vice President Harris on June 24, 2021 to discuss the details of the legislation.
Under the details known so far, the agreement would allow for about $559 billion in new spending to fix crumbling roads, bridges, railroads and airports across the country. There is a sense of urgency to reach an agreement in light of the Senate’s July 4 recess.
New York to End Its State of Emergency
New York’s state of emergency originally declared in March 2020 due to the COVID-19 pandemic expired on June 24, 2021 and will not be renewed. Due to the decrease in new COVD-19 cases and hospitalizations and more New Yorkers receiving the vaccination, Gov. Cuomo will not renew the state of emergency declaration. As a result, any emergency powers granted to the Governor will also be lifted.
Prepared by Nicholas M. Hriczko