What’s Shakin’ in SALT News – July 2021
Can Taxpayers Who Manage Their Own Investment Portfolios Deduct R...
IRS Audits May Be Increasing, So Be Prepared
The Internal Revenue Service (IRS) recently announced qualifying families will begin receiving monthly automatic advance child tax credit (CTC) payments on July 15, 2021. Payments will be up to $300 a month per child under age six and up to $250 a month per child age six to 17. The payments will be disbursed on July 15, Aug. 13, Sept. 15, Oct. 15, Nov. 15 and Dec. 15 and will cover half of the amount of the credit many qualifying families expect to receive when filing their 2021 federal income tax returns.
In 2021, the American Rescue Plan (ARP) increased the maximum CTC to $3,600 per child under age six and $3,000 per child aged six to 17. Prior to the increase, the amount was up to $2,000 per eligible child. The new maximum CTC is available to taxpayers with a modified adjusted gross income (AGI) of $75,000 or less for singles, $112,500 or less for heads of household and $150,000 or less for married couples filing jointly, as well as qualified widows and widowers. Taxpayers can view their modified AGI on Line 11 of their 2020 Form 1040 or 1040-SR. Beyond these income thresholds, the additional amount above the original $2,000 credit is reduced by $50 for every $1,000 in modified AGI (either $1,000 or $1,600 per child). The credit is fully refundable for 2021, meaning families can benefit from it even if they do not owe federal income tax.
Families are eligible for the direct payments if they:
If you’re unsure of your eligibility for the advance CTC, you can check the CTC Eligibility Assistant, register with the IRS using the Child Tax Credit Non-filer Sign-up Tool or check the status of your monthly payments and update your information using the CTC Update Portal.
Have questions about your unique tax situation and qualifying for the CTC? Contact Doeren Mayhew’s dedicated tax advisors today.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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