Announcement

Collapse
No announcement yet.

Latest Gimmick IRS has to deal with

Collapse
X
Collapse
 
  • Page of 1
  • Filter
  • Time
  • Show
Clear All
new posts
Previous template Next
    #1

    Latest Gimmick IRS has to deal with

    I believe Congress is the biggest problem the IRS has to face - not taxpayers.

    Heard something today unbelievable.

    IRS is increasing Child Tax Credit in 2021 to $3000, this time including children up to 17 years of age. The difference of $1000 is being direct deposited into their parents bank account over a period of 12 months. This means they will be paid $83.33 per month for the next year.

    This is absurd. Please someone tell me I heard this wrong.
    Tags: None
    #2
    This law was passed back in March, the American Rescue Plan Act (ARPA). In addition to the two provisions you mention, there are several others. But you got the advance payments wrong. Up to 50% of the credit is to be paid in advance monthly payments between July and December 2021, then reconciled on the tax return, similar to RRC. For children under age 6, the credit is $3,600, not $3,000, so for them the monthly payment for six months would be $300.

    Also, money was appropriated to cover the administrative costs.


    5 (5) APPROPRIATIONS TO CARRY OUT ADVANCE
    6 PAYMENTS.—Immediately upon the enactment of this
    7 Act, in addition to amounts otherwise available, there
    8 are appropriated for fiscal year 2021, out of any
    9 money in the Treasury not otherwise appropriated:
    10 (A) $397,200,000 to remain available until
    11 September 30, 2022, for necessary expenses for
    12 the Internal Revenue Service to carry out this
    13 section (and the amendments made by this sec
    14 tion), which shall supplement and not supplant
    15 any other appropriations that may be available
    16 for this purpose, and
    17 (B) $16,200,000 to remain available until
    18 September 30, 2022, for necessary expenses for
    19 the Bureau of the Fiscal Service to carry out this
    20 section (and the amendments made by this sec
    21 tion), which shall supplement and not supplant
    22 any other appropriations that may be available
    23 for this purpose.
    "You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard
    • Likes 1

    Comment

      #3
      A few other child-friendly provisions, which can be found in TheTaxBook industry news releases:


      Dependent Care Expense Credit
      Effective for 2021 only, the Child and Dependent Care Expense Credit is refundable. The
      dollar limitation on expenses paid for a qualifying person is increased from $3,000 to
      $8,000 for one qualifying person and from $6,000 to $16,000 for two or more qualifying
      persons. The maximum percentage of 35% is increased to 50% for AGI up to $125,000 with
      the credit percentage phasing out and reduced to zero when AGI reaches $438,000      .
      (note that the prior version of the credit never completely phased out no matter how high the AGI, it was always a minimum of 20%)

      Dependent Care Assistance Program
      Effective for 2021 only, the $5,000 maximum exclusion in increased to $10,500 ($5,250
      MFS).
      Last edited by Rapid Robert; 05-15-2021, 05:10 PM.
      "You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard
      • Likes 1

      Comment

        #4
        One more reason why I am retiring at the end of this tax season.
        Jiggers, EA

        Comment

          #5
          Can our clients elect not to take any of this advance money?

          Comment

            #6
            Please someone tell me I heard this wrong.[/QUOTE]

            Looks like I was wrong. But according to RR, it's even worse than I thought!! Thanks RR

            Can a taxpayer refuse? Decency dictates that they should be able to do that, but how? The IRS is taking these payments on without any prompting from anyone but Congress, and a taxpayer cannot successfully contact IRS. This idiocy begins in July.

            Comment

              #7
              Apparently, the IRS is opening a portal by July so taxpayers can opt out or update their information or swipe left or...

              Comment

                #8
                Originally posted by Lion View Post
                Apparently, the IRS is opening a portal by July so taxpayers can opt out or update their information or swipe left or...
                Apparently local social service agencies that typically deal with low income people are sending out flyers talking about it as being a "very good" thing. Two of my client's called me because their children with minor children are getting EIC and SNAP benefits and saw it.
                Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

                Comment

                  #9
                  The IRS published IR-2021-113 today, "IRS, Treasury Announce Families of 88% of Children in the U.S. to Automatically Receive Monthly Payment of Refundable Child Tax Credit"

                  Here is the web site where future updates will be posted.

                  Advance Child Tax Credit payments in 2021 | Internal Revenue Service
                  https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021
                  2021 Child Tax Credit information.


                  Thankfully, there will be an option for families with children born in 2021 to update their info.
                  "You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard
                  • Likes 1

                  Comment

                    #10
                    Wouldn't the Social Security Administration automatically notify IRS of newborns?
                    Uncle Sam, CPA, EA. ARA, NTPI Fellow

                    Comment

                      #11
                      The SSA may provide to the IRS a database of newly-issued SSNs matched with names & DOBs, but there is no way they could tell the IRS who is eligible to claim a particular child as a dependent.
                      "You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard

                      Comment

                        #12
                        RR - the link you provided doesn't speak about 2021 newborns and how parents can obtain credits for newborns.
                        Uncle Sam, CPA, EA. ARA, NTPI Fellow

                        Comment

                          #13
                          Originally posted by Uncle Sam View Post
                          RR - the link you provided doesn't speak about 2021 newborns and how parents can obtain credits for newborns.
                          You are 100% correct. As I stated previously, "Here is the web site where future updates will be posted."
                          "You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard

                          Comment

                          Previous template Next

                          Disclaimer

                          Collapse

                          This message board allows participants to freely exchange ideas and opinions on areas concerning taxes. The comments posted are the opinions of participants and not that of Tax Materials, Inc. We make no claim as to the accuracy of the information and will not be held liable for any damages caused by using such information. Tax Materials, Inc. reserves the right to delete or modify inappropriate postings.

                          Working...
                          X