June 2nd, 2021 Brad Hennebert
Its not too early to look ahead to what’s in store for tax season 2021. COVID reliefs will impact tax returns for years! Here is a list of a few key updates for 2021:
You may have received increased amounts of the credit and eligible expenses for dependent care.
For 2021, the top credit percentage of qualifying expenses increased from 35% to 50%. In addition, eligible taxpayers can claim qualifying child and dependent care expenses of up to:
If your employer offers a dependent care FSA, that can include tax-free benefits of $10,500, up from $5,000!. But, your employer must adopt this change, so speak with your HR department before you spend anything.
In 2021, the maximum EITC for those with no dependents is $1,502, up from $538 in 2020. Available if your AGI is below $27,380 in 2021, and it can be claimed by eligible workers who are at least 19 years old. In the past, the EITC for those with no dependents was only available to people ages 25 to 64. Full-time students under age 24 don’t qualify.
Currently, the credit is worth up to $2,000 per eligible child, this year it increases to as much as $3,000 per child for dependents ages 6 through 17, and $3,600 for dependents ages 5 and under. The maximum credit is available to taxpayers with a modified AGI of:
Additionally, low and moderate income families may be eligible for an advance on this credit for the last half of year! The IRS will soon share materials and information on social media and by email on this, but you can read more now on their website!
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