Fast Facts for April 28, 2021
Remember when I told you the president had a two part stimulus plan – part one was the infrastructure/jobs plan I detailed here – well – part two is now out. The president has unveiled his $1.8 trillion American families plan.
Let first say — *neither* of these stimulus plans have a fourth stimulus check included for you nor is there a $15,000 credit for first time home buyers nor is there any student loan forgiveness. It’s just not there. So don’t believe all the click bait.
What *is* in the plan – generally – assistance in child care, paid family leave and education.
The president is proposing an extension (possibly making permanent) the enhanced child tax credit with the monthly payment option ($3000/$3600) included in the last stimulus bill.
$225 billion to help keep parents in the workforce by making child care more affordable. (families earning 1.5 times their state median income will pay no more than 7 percent of their income on child care for kids younger than 5.)
The plan would provide a total of 12 weeks of guaranteed -at least partial – paid parental, family and personal illness leave by the 10th year of the program.
Provide two years of free community college.
Invest $200 billion dollars in universal pre-k for all 3- and 4-year-olds through a national partnership with states.
Permanently extend the more generous health care subsidies approved in the last stimulus law.
And make permanent the expansion of the earned income tax credit for workers without children…among other things.
So how does the president propose we pay for it?
He suggests increasing taxes on those in the top 1% by returning the top marginal income tax rate to 39.6%. (up from 37%)
And requiring households earning more than $1 million dollars a year, to pay higher taxes on capital gains by increasing that rate to 39.6%. (up from 37%)
Again—this is only a proposal and everything is subject to negotiation and change.
More from the White House here.
PLUS
Today the IRS issued *new* guidance about the increased child tax credit and the monthly payments starting in July.
The most important thing to understand at this point is – if you want to take advantage of the monthly option, you need to file your 2020 taxes. The IRS will base your eligibility and estimate your monthly payment amount on that return. The IRS also encourages you to file electronically because that’s the easiest way to get you the money.
This increased credit and monthly option – at this point — is *only* valid for 2021.
If you file joint married and make less than $150,000 a year, file head of household and make less than $112,500 a year or if you file single and make less than $75,000 a year…
You’ll receive up to $3000 dollars per child no older than 17 at the end of the 2021
And up to $3600 dollars per child no older than five at the end of 2021.
If you qualify those monthly payments will start in July and will run until December.
You’ll receive 50% of your credit broken up monthly. Here are the maximum payment amounts.
If you want the monthly option, you must also have a main home in the united states for more than half the year.
If you would rather *not* do the monthly payment and take the full credit when you file your 2021 taxes in 2022, you will have the opportunity to opt out. You will also have the opportunity to update information on income, filing status or the number of qualified children. Those details are coming.
It’s also important to note this tax credit for qualifying children is fully refundable – meaning that taxpayers can benefit from the credit even if they don’t have earned income or don’t owe any income taxes.
Here’s EXACTLY what the IRS says about this.
