AMERICAN RESCUE PLAN OF 2021 (ARPA)
This bill is 700 pages long and we are focusing on the following areas right now:
- retroactive treatment of taxation of 2020 unemployment benefits. You are allowed to exempt from income $10.200 if your adjusted gross income falls under $150,000. We will be asking you to consider IRA and HSA contributions which affect adjusted gross income.
- if you received a 2020 PTC (premium tax credit) helping you with health insurance premiums and your income is too high NO REPAYMENT is now required.
- 2021 stimulus started going out the week of March 15. This is $1,400 per person for eligible individuals spouse and dependents. This will be given to single tax payers with adjusted gross income under $80,000 and married tax payers with adjusted gross income under $150,000.
- 2021 only the child tax credit has been increased to $3,000 for children 6 to 18 years of age and $3,600 for children under 6 years of age. This applies to eligible single individuals with adjusted gross income under $75,000 and married individuals with adjusted gross income under $150,000.
- The 2021 earned income credit now can be taken for individuals who have investment income up to $10,000 (used to be $3,650 you couldn’t get EIC).
- The 2021 dependent care credit is fully refundable and has been increased on expenses of up to $8,000 per child (used to be $3,000 per child). The credit rate has been increased to 50% of the costs.
- Sick and family leave has been extended into 2021 for employers.