On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law. Some highlights...
Recovery Rebates
$1,400 per taxpayer and dependents
Income (AGI) limits:
Single up to $75k for full payout, phased out up to income of $80k
Head of Household up to $112,500 for full payout, phased out up to income of $120k
Joint up to $150k for full payout, phased out up to income of $160k
Payments are credits against 2021 taxes
Unemployment Relief
Additional weekly unemployment benefits of $300 per week until September 2021
First $10,200 of unemployment benefits exempt from 2020 federal tax for households with income (AGI) less than $150k
Child Tax Credit
Increased 2021 credit to $3k per child, $3,600 for children under six
Income (AGI) limits:
Single up to $75k for full payout, phased out up to income of $200k
Head of Household up to $112,500 for full payout, phased out up to income of $200k
Joint up to $150k for full payout, phased out up to income of $400k
Includes children up to 17-year-old
Advanced payments will be issued starting in July 2021, with remaining credit to be received on 2021 tax return (will be a website to opt out or update information)
Overpayments to be repaid on 2021 tax return for taxpayers with income (AGI) over:
Single $80k
Head of Household $100k
Joint $120k
Dependent Care Assistance
Increases 2021 credit from 35% to 50% of qualified expenses
Increased eligible expenses to $8k for one child and $16k for two or more
Maximum employer-provided dependent care benefits increased to $10,500 or $5,250 for MFS
Phased out for income (AGI) between $125k-$400k
Earned Income Tax Credit
Increased credit and income limits for filers without children
Can use 2019 or 2020 income to figure credit
Paid Sick and Family Leave Credits
Extended to September 30, 2021
Increased limit on wages to $10k from $12k
New 10-day period is available after March 31, 2021
Self-Employed days increased to 60 days from 50
Employee Retention Tax Credit
Extended through 2021
Premium Tax Credits
For 2021 and 2022 increases income level to qualify and credit amount
Advanced premiums available to those receiving unemployment
Income (AGI) limits of excess premium tax credits