ANNUAL MEETING NOTICE
CTA’s upcoming annual meeting serves two purposes: to review the season just past and to elect the Board for the next fiscal year. All volunteers are invited to attend. This is a great way to learn more about what CTA does.
Here are the details:
WHEN: Tuesday, August 3, 2021. The meeting starts at 6:30pm.
WHERE: We will meet virtually via Google Meet. If you would like to have access, including phone access, to this meeting, please contact us at generalinfo@communitytaxaidnyc.org
CHANGES IN THE CHILD TAX CREDIT FOR 2021
The American Rescue Plan Act was mentioned in a previous issue of this newsletter. in addition to Code changes affecting the 2020 tax year, changes effective for the 2021 season were also made. We will focus on one of these changes designed to help families.
For families with children, the Child Tax Credit ("CTC") offers financial relief. For the 2021 tax year, several changes have been made to the CTC. It includes defining a qualifying child, increasing the amount of the credit, increasing phase-out limitations and making the credit refundable. Advance payments of this credit are available as well.
The definition of a qualifying child has been broadened. It includes two groups: [a] qualifying children under age six and [b] qualifying children between the ages of six to seventeen. This distinction is important because the CTC differs. For those noted in [a], the credit increases to $3,600 per qualifying child. A $3,000 credit per qualifying child are for those listed in [b] above. All qualifying children must be claimed as a dependent by the taxpayer.
The CTC is subject to income phase outs that can lower or eliminate the credit. For the higher CTC ([a], above), phase-out begins for Married Filing Jointly taxpayers with income over $400,000, and $200,000 for all other taxpayers. For the lower CTC ([b], above), phase-out begins for Married Filing Jointly taxpayers with income over $150,000, $112,500 for Head of household taxpayers and $75,000 for all other taxpayers. It should be noted that incomes of CTA taxpayers do not reach these amounts. In other words, they would receive the full benefit of the CTC.
Unlike prior years, the CTC for the 2021 tax year is fully refundable. And with the government trying to help families during a period where the job market is expected to make a comeback, taxpayers can receive advance payments of the CTC. Starting July 15, the IRS has been issuing monthly payments to families with the CTC being calculated on information from their filed 2019 or 2020 tax returns. For the last six months of the year, taxpayers can receive approximately one half of the calculated CTC amounts, with the balance to be received once a taxpayer files his/her 2021 tax return. A portal on irs.gov has been established to monitor the payments. The portal also allows taxpayer to change to their tax information. Examples of changes include the birth of a child in 2021 and, if the taxpayer prefers, opting out of receiving an advance payment. Taxpayers, as per their discretion, may want a higher refund on their 2021 return and delaying the CTC until filing this return would accomplish this.
