Don’t give the IRS more money than you’re supposed to
Key Provisions of Biden’s COVID Stimulus Bill
Labeled as the “American Rescue Plan Act”, this bill will affect a lot of individuals and businesses. Unemployment Compensation, retroactive to 2020 tax year. The first $10,200 of unemployment benefits will be nontaxable per taxpayer, assuming their adjusted gross income is below $150,000, retroactive to 2020. If you have already filed, you will need to file an amended return.
$1,400 stimulus checks will be advanced to taxpayers and their spouses, as well as any dependents, assuming the taxpayers’ adjusted gross income is below $75,000 ($150,000 if married filing jointly). (Did you get yours on St. Patty’s day?) The phase-out was greatly reduced for this new stimulus check, with anybody above with an adjusted gross income above $80,000 receiving none. Remember though, that this is an advance of a tax credit, so if you don’t receive your stimulus check and you are eligible, you will receive the benefit on next year’s tax return.
Employee Retention Credit
The refundable tax credit against an employer’s share of Social Security tax equal to 70% of qualified wages will now be available through December 31, 2021. Originally, this credit was extended by the second round of stimulus until June 30, 2021.
Eligible restaurants impacted by the pandemic will have access to $5 billion in funding through the U.S. Small Business Administration. Eligible entities, such as restaurants, food trucks, bars, and caterers will have access to the funding if their gross receipts in 2019 were less than $500,000. The formula for the grant will be the difference between 2020 revenue and 2019 revenue, less any PPP money received. Be on the lookout for this application process to begin through sba.gov.
The Child Tax Credit
This has been expanded for the tax year 2021, with $3,600 provided for those dependents under age 6, and $3,000 provided for dependents under age 18 as of December 31, 2021. The child tax credit is fully refundable.
Child and Dependent Care Credit were enhanced and made refundable
There is a bit more of a calculation that goes into this one, feel free to reach out to your friendy Nerd for more information!