TDC Tax Services, LLC june Newsletter |
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Supporting you with practical tax information! |
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New Tax Updates for 2021 - Child and dependent care credit increased (2021 only). The maximum credit increased to 50% of the taxpayer’s employment-related expenses, maximum $4,000 for one qualifying individual, or $8,000 for two or more qualifying individuals.
- The EITC expanded for 2021 and future years. The amount of investment income increased to $10,000. For 2020 returns, you can use either your 2019 income or 2021 income to calculate your EITC.
- Expanded child tax credit (2021 only). Amount increased, available for qualifying children who turn age 17 in 2021, and fully refundable for most taxpayers. Many taxpayers can receive half of the estimated 2021 credit, in advance. The IRS is sending letters to eligible recipients.
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Child Tax Credit - From July 15 through December 2021, Treasury and the IRS will advance one half of the estimated 2021 child tax credit in monthly payments to eligible taxpayers. (The remaining child tax credit will be based on their 2020 information when they file their 2021 income tax return).
- The monthly advance payments will be estimated from their 2020 tax return, or their 2019 tax return if 2020 information is not available.
- The new law increases the credit to as much as $3,000 per child ages 6 through 17 at the end of 2021, and $3,600 per child ages 5 and under at the end of 2021.
The maximum credit is available to taxpayers with a modified adjusted gross income of $75,000 or less for single filers and married persons filing separate. returns, $112,500 or less for heads of household, $150,000 or less for married couples filing a joint return and qualifying widows and widowers.
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TDC Tax Services, LLC TDC Tax Services, LLC is a small tax preparation and consulting firm in Minnesota and serves clients nationally with online services. We help individuals and small businesses with tax, accounting and financial needs. Enrolled Agent, IRS Authorized E-File Provider, and Quickbooks Pro-Advisor. | | |
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