Taxes

CHILD TAX CREDIT:

What is the expanded Child Tax Credit?

The American Rescue Plan, signed into law on March 11, 2021, increased the Child Tax Credit from $2,000 per child to $3,000 per child for children over the age of six and from $2,000 to $3,600 for children under the age of six, and raised the age limit from 16 to 17. All working families will get the full credit if they make up to $150,000 for a couple or $112,500 for a family with a single parent (also called Head of Household).

In Arizona's First Congressional District, the expanded Child Tax Credit:

  • benefits 167,200 children, 94.1% of all children in the district
  • lifts 13,700 children out of poverty–including 4,800 kids under the age of six– and 6,000 children out of deep poverty

The average benefit for 43,900 First District households is $3,600; families with children in poverty will receive $6,200 on average.

Monthly payments will begin to arrive on July 15, 2021.

Who is eligible?

If you’ve filed tax returns for 2019 or 2020, or if you signed up to receive a stimulus check from the Internal Revenue Service, you will get this tax relief automatically. You do not need to sign up or take any action.

If you didn’t make enough to be required to file taxes in 2020 or 2019, you can still get benefits. Click HERE for more information for non-filers.

Where can I get more information?

An FAQ for the Child Tax Credit is available, HERE.

Information about the Child Tax Credit is also available, HERE, on the IRS website.

Información sobre El Crédito Tributario por Hijos en español está disponible, AQUÍ.

 

INFORMATION AND RESOURCES FOR FILING YOUR 2020 TAXES:

IRS Resources:

Rebate Recovery Credit: The Recovery Rebate Credit is authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the COVID-related Tax Relief Act. It is a tax credit against your 2020 income tax. Eligible individuals who did not receive the full amounts of both Economic Impact Payments may claim the Recovery Rebate Credit on their 2020 Form 1040 or 1040-SR. To determine whether you are an eligible individual or the amount of your Recovery Rebate Credit, complete the Recovery Rebate Credit Worksheet in the Instructions for Form 1040 and Form 1040-SR. More information is available, HERE.

If you need additional help with a tax matter, a tax bill you will struggle to pay, or a notice from the IRS and have questions, please check out the Taxpayer Advocate Service, an independent organization within the IRS created to help taxpayers and to protect their rights.

For information on free, professional tax help, qualifying taxpayers can find more information about Volunteer Income Tax Assistance (VITA) clinics HERE. Given the limited in-person services available due to the coronavirus, please check the website first to ensure sites will still be open. 

 

TAX-RELATED CORONAVIRUS LEGISLATION AND UPDATES FOR EMPLOYERS: 

As part of the Families First Coronavirus Response Act, businesses and tax-exempt organizations with 500 employees or fewer are required to provide emergency paid sick, family, and medical leave. For an employee who is unable to work because of mandated- or self-quarantine, your business may receive a refundable sick leave credit at the employee's regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days. For an employee who is unable to work because they need to care for a child whose school or child care facility is closed due to the Coronavirus, your business may receive a refundable child care leave credit equal to two-thirds of the employee's regular pay, capped at $200 per day or $10,000 in the aggregate.

These credits are dollar-for-dollar and designed explicitly to fully reimburse most employers for the cost of providing leave to their workers. For all of the details, view the IRS release HERE.

Under the CARES Act, employers have access to a new, refundable Employee Retention Tax Credit designed to help those businesses who keep employees on their payroll, but who choose not to or are ineligible for the SBA Paycheck Protection Act. This credit is worth 50% of wages paid by an employer for the first $10,000 of compensation, including health benefits, to an employee. The credit is available to all employers regardless of size, including tax-exempt organizations.

  • Eligible employers must have operations fully or partially suspended due to COVID-19 or 
  • Have gross receipts decline by more than 50% when compared to the same quarter last year. 

The only employers excluded from participating are state and local governments and employers who receive Small Business Loans. The credit is provided for wages paid or incurred from March 13 through December 31, 2020. For more information on the Employee Retention Tax Credit, click HERE