The American Rescue Plan has now been signed into law. It includes an expansion of the child tax credit for 2021. That plan expands the age for qualifying children to include 17-year-olds. It increases the credit to $3,000 per child for many families (with $3,600 being the amount for children under age 6). The $2,500 earnings floor is removed and the credit will be fully refundable. Finally, half of the credit will be paid in advance by the IRS making monthly payments to families from July to December 2021.
In this episode, I touch on the child tax credit expansion and discuss the IRS role in distributing those payments of the credit in 2021. The child tax credit and the earned income credit are times that the IRS is in the role of benefits distributor. That is a change for the IRS from compliance enforcement. I look at the dichotomy as the IRS faces their pivot from one role to another. What will their approach be for the future?
Note: As of the recording, the American Rescue Plan had not passed into law yet.
Episode 140: Recent Tax Recap
Episode 139: Highlights for the Tax Season
Episode 138: Tax Court Return
Episode 137: The Child Tax Credit
Episode 136: State of IRS Collections
Episode 135: CAF Unit Issues
Episode 134: Form 1040 Basics, Part 2
Episode 133: Form 1040 Basics, Pt. 1
Episode 132: The Recovery Rebate Credit
Episode 131: 2021 New Year Tax Thoughts
Episode 130: 2021 Annual LITC Grantee Conference
Episode 129: 2020 Year in Review
Episode 128: Collections Presentation
Episode 127: 2020 LITC Conference
Episode 126: Form 2848 and the CAF Unit
Episode 125: Taxgirl Interview
Episode 124: Virtual Tax Conferences
Episode 123: November Updates
Episode 122: Virtual Tax Court
Episode 121: U.S. Tax Court Nonattorney Examination
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