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Deadline Updates and American Rescue Plan Act of 2021

Posted by Admin Posted on Apr 03 2021

Deadline Updates

 

April 15, 2021:

  • The first quarter of 2021 federal estimated tax payment is due.

 

May 17, 2021:

  • Federal, Utah, and some other state individual income tax returns are due.
  • IRA or HSA contributions are due.

 

American Rescue Plan Act of 2021

 

Here is a brief summary of the bill.

 

Individual Provisions

 

  • Recovery rebates for individuals.  To help individuals stay afloat during this time of economic uncertainty, the government is sending up to $1,400 payments to eligible taxpayers and $2,800 for married couples filing joint returns. An additional $1,400 additional payment is being sent to taxpayers for each dependent.  The payment phases out for higher income taxpayers.  The phaseout begins at modified adjusted gross income of $75,000 for single taxpayers and $150,000 for married joint taxpayers.  The rebates phase out quickly ($80,000 adjusted gross income (AGI) for single & $160,000 for married).
  • Child Tax Credit.  For 2021 only the credit is increased to $3,000 ($3,600 per child under six) per qualifying child.  17 year olds also qualify for the credit.  The credit starts to phase out at $75,000 for single and $150,000 for married joint.
  • Advance Payment of Child Tax Credit.  For 2021 only, 50% of the credit will be paid in advance monthly starting in July 2021 and ending in December 2021.      
  • Unemployment Benefit Exclusion.  For 2020 only the first $10,200 is excluded from taxable income.  Married Joint applies to each spouse.  Exclusion doesn’t apply if modified AGI is $150,000 or more.
  • Premium Tax Credit for health insurance is expanded for 2021 and 2022 and 2020 paybacks are suspended.  This means if your 2020 income was too high you don’t have to repay any advance payments.
  • Earned Income Credit for Singles Without Children.  The credit is increased and also applies after age 65.  It can apply at age 19 for non-students and others.  So it can apply from age 19 on.
  • Child and Dependent Credit (Day Care).  For 2021 the credit is refundable.  For 2021 it is also increased to 50% of expenses ($4,000 for one child and $8,000 for two or more children).

 

Business Provisions.

 

  • Payroll Credits for Paid Sick and Family Leave.  The credits for sickness and family leave due to Covid-19 are extended through September 30, 2021.  The wages for the credit restart on April 1, 2021.  If an employee already used up their days they can qualify for more days.    
  • Employee Retention Credit.  The credit has been extended to December 31, 2021.
  • COBRA Continuation Coverage.  The law provides COBRA assistance for those eligible between March 11-September 30, 2021.
  • More 1099-K Forms for Credit Card Sales.  Starting in 2022 third party networks like credit card companies, PayPal, Airbnb, etc. will have to send a 1099-K to anyone who was paid over $600 during the year.