Page 35 - BusinessWest April 14, 2021

• $160 billion earmarked for vaccine and test- ing programs to improve capacity and help curb the spread of COVID; this includes funds to cre- ate a national vaccine-distribution program that would offer free shots to all U.S. residents regard- less of immigration status; and
• Other measures that address nutritional
Cash Payments
An additional $1,400 payment is being sent for each dependent of the taxpayer, including adult dependents (such as college students and parents). The previous two stimulus payments limited the additional payments to dependent children age 16 or younger.
$400 that would have applied through Aug. 29 under the House version. The extension also cov- ers the self-employed and individual contractors (such as gig workers) who typically are not enti- tled to unemployment benefits.
Additionally, the first $10,200 (per person if married filed jointly) of unemployment insur- ance received in 2020 would be non-taxable income for workers in households with income up to $150,000. If you have already filed your 2020 federal taxes (Form 1040 or 1040-SR), there is no need to file an amended return to figure
the amount of unemployment compensation to exclude. The IRS will refigure your taxes using the excluded unemployment compensation amount and adjust your account accordingly. The IRS will send any refund amount directly to you.
Child Tax Credit
The child tax credit will be expanded consid- erably for 2021 to help low- and middle-income taxpayers (many of the same individuals who will be eligible for stimulus payments), and the credit will be refundable.
JIM MORAN
“The relief package, which is Biden’s first major legislative initiative, is one of the largest in U.S. history and follows on the heels of the Trump administration’s $900 billion.”
The amount of the stimu- lus payment is based on information in the taxpayer’s 2020 tax return if it had been filed and processed; other- wise, the 2019 return is used. The amount of the payment will not be taxable income for the recipient.
The stimulus payments are subject to certain limita- tions with respect to a house- hold’s adjusted gross income.
assistance, housing aid, and funds for schools. Here are details on many (but not all) of the
provisions of the ARP.
MEASURES AFFECTING INDIVIDUALS
The ARP includes several measures to help individuals who have been adversely affected by the impact of the pandemic on the economy. The additional round of stimulus checks, in conjunc- tion with supplemental federal unemployment benefits, should provide some measure of relief to individuals. A temporarily enhanced child tax credit offers another area of assistance.
Households with adjusted gross income of more than $80,000 for single filers, $120,000 for head- of-household filers, and $160,000 for married fil- ing jointly will not receive any payment. For tax- payers with adjusted gross incomes below those respective limitations, the stimulus is subject to a phaseout beginning at $75,000 for single filers, $112,500 for heads of household, and $150,000 for married filing jointly.
Extended Unemployment Benefits
The current weekly federal unemployment benefit of $300 (which applies in addition to any state unemployment benefits) is extended through Sept. 6, 2021; the Senate cut back the
The amount of the credit will increase from the current $2,000 (for children under 17) to $3,000 per eligible child ($3,600 for a child under age six), and the $3,000 will also be available for children who are 17 years old. The increase in the maximum amount will phase out for heads of households earning $112,500 ($150,000 for couples).
Because the enhanced child tax credit will be fully refundable, eligible taxpayers will receive
Numbers
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Richard F. Burkhart, CPA and Salvatore J. Pizzanelli, CPA, JD, PFS
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