CHILD TAX CREDIT
Starting on January 31 find the Advance Child Tax Credit payment information in your online IRS account. People who qualify for this credit should file a 2021 Income Tax Return to claim the remainder of the credit that is eligible.
CHILD TAX CREDIT
This is a special rule for 2021 that includes an increase of this credit from $2,000 to $3,000 per eligible child under 18 years old and $3,600 per child under 6 years old. It is important to note that the child tax credit age changes for the year 2021 to all those who are under 18 years of age. (For previous years, it was under 17 years old). Taxpayers who received the tax advance tax credit will have to reconcile the amount received in their income tax returns. The IRS will send you, in January 2022, letter 6419 which will be used in this reconciliation. Like most tax credits, there is a phase-out on this benefit.
2021 RECOVERY REBATES
The third round of Economic Impact Payment (EIP3) was authorized by the American Rescue Plan of 2021. The EIP3 was $1,400 for each eligible individual plus $1,400 for each dependent. Prior to receiving the EIP3, notice letter #1444 was sent by the IRS. In early 2022, the IRS will send notice letter 6475 to confirm the total amount sent to you. Unlike the first two payments, the third payment is not restricted to children under 17. "Eligible individuals received a payment based on all of their qualifying dependents claimed on their return, including older relatives like college students, adults with disabilities, parents, and grandparents".
The act extends the provision allowing for employers to make loan payments up to the specific amount that are tax free to the employee through 2025.
The IRS states Virtual currency transactions are taxable by law just like transactions in any other property. Taxpayers transacting in virtual currency may have to report those transactions on their tax returns.
Bitcoin can be digitally traded between users and can be purchased for, or exchanged into, U.S. dollars, Euros, and other real or virtual currencies.
DEPENDENT CARE CREDIT
There is a maximum amount of eligible expenses used to compute the dependent care credit:
$8,000 for one qualifying person.
$16,000 for two or more qualifying persons.