Major changes came for the child tax credit in 2021. What you need to know:
-Easier to qualify – Income limitation has been removed + new abode rule + dependent qualification rules stay the same
-Age restrictions have been expanded from 16 to 17
-Credit has increased to up to $3,000 and $3,600 (for children 5 and under)
-Base credit of $2,000 remains the same
-New phase out rules for amounts over the base credit
-Applies to 2021 but may be made permanent
-Credit is now fully refundable as opposed to partially refundable
-Child tax credit is advanced by 50% unless you opt-out or modify
-Children are aged for 2021 based on 2020 or 2019 filing
-IRS to send notices to taxpayers about advancement
-Safe harbor allows for easier repayment for amounts overfunded
-Online tools are available to calculate the tax credit
DISCLAIMER: All Freyman CPA, P.C. videos are provided for general informational purposes only and deal with dynamic, time-sensitive, complex matters that may not apply to particular facts and circumstances. Information provided here should not be relied upon as a substitute for professional advice in connection with any particular matter.
We try to ensure accuracy, however, all information provided to you is provided “as is”, with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied.
Any information provided to you is not a substitute for professional legal, tax, or accounting advice.
Laws, rules, policies, and regulations change from time to time and the application and impact of laws can vary widely based on the specific facts involved. Accordingly, before making any decision or taking any action, you should consult a professional advisor.
Facebook – https://www.facebook.com/businessaccountantsjacksonville
Official Website – https://www.taxproff.com