April 2021
There have been several recent changes with tax implications that we would like to highlight. As always, please continue to contact us with specific questions.
Individuals
American Rescua Plan Act of 2021 (ARPA):
Updated IRS Deadlines
Get My Payment Tool link
Business
This email is intended to provide a high-level summary of the more recent changes and updated guidance. As guidance may change, or the above may not be applicable to all situations, please contact us if you need assistance.
Recovery rebate credits (stimulus checks): ARPA provides a third round of nontaxable stimulus checks directly payable to individuals. The maximum payments are $1,400 per eligible individual ($2,800 for married joint filers) and $1,400 for each dependent. The payment phases out proportionally between $75,000 and $80,000 AGI for single filers, $112,500 and $120,000 for head of household filers, and $150,000 and $160,000 for married joint filers. You can use this link to determine how much you think you will receive. The amount will vary depending on the information from your most recently filed return.
Child Tax Credit: For 2021, Qualifying children include 17-year olds and the credit is increased to $3,000 per child ($3,600 for children under six years old). The increase is subject to modified AGI phase out rules. Eligible taxpayers will start to see periodic payments from the IRS as an advance on this credit beginning July of 2021.
Child and Dependent care credit: For 2021, the credit is increased from $3,000 to $8,000 if there is one qualifying care recipient and from $6,000 to $16,000 if there are two or more.
Healthcare premium assistance credit: Those whose income is over 400% of the poverty line will not be obligated to pay back the excess for 2021 or 2022. For 2020, individuals who received an excess credit will not be required to pay it back. If this impacts your previously filed 2020 return, you do not need to file an amended return.
Income exclusion for unemployment benefits: For 2020, taxpayers with a modified AGI less than $150,000 can exclude from gross income $10,200 per person of their unemployment benefits. Per IRS guidance, there is no need to file an amended return for 2020, however we will still need to review affected returns at a later date to ensure accuracy.
Student loan forgiveness: Beginning in 2021 and continuing through 2025, the forgiveness of many types of loans for post-high school education will not result in income inclusion for the forgiven amounts.
The IRS and Oregon filing deadlines for individuals has been extended until Monday, May 17th.
The deadline for paying first quarter 2021 federal and state estimated tax payment remains on April 15th.
The deadline for making 2020 IRA and HSA contributions has been extended until May 17th.
You can use the IRS provided tool to check your payment status.
If you receive a statement that says payment status not available, the IRS either has not processed your stimulus payment, or you are not eligible for the payment.
If you receive a message that says need more information, the payment was returned as it was unable to be delivered.
The deadline to apply for PPP loans has been extended to May 31, 2021. However, it is expected that funding will run out mid-to-late April. There have been several changes to this program, so if you would like to discuss your business’s potential eligibility, please contact us.
If your business has experienced a significant decline in gross receipts or a full/partial suspension of business due to a government order, you may be eligible to receive an employee retention tax credit (ERC). Please reach out to us if you think you may be eligible.
