MEDIA WARNING – Wolters Kluwer is investigating President Joe Biden's American Rescue Plan Act tax rules

The US House of Representatives passes the next COVID-19 relief bill and transfers it to the US Senate

Wolters Kluwer Tax & Accounting:

What: President Joe Biden is trying to prioritize an emergency package of relief efforts for individuals and businesses that continue to suffer from the COVID-19 pandemic. On February 27, 2021, the US House of Representatives passed the American Rescue Plan Act, which will now pass into the US Senate.

Why: In many cases, the proposed tax rules of the American Rescue Plan Act are extensions or additions to existing tax law to provide immediate relief to individuals and businesses affected by the pandemic. The provisions generally apply only for 2021 and include:

  • Additional Stimulus Payments: Provision of $ 1,400 stimulus payments that include both dependent children and adults with the option of two rounds of payments; The first is based on 2019 and the second is based on 2020 tax return income

  • Extended Child Tax Credit: Increase tax credit, extend eligible age of children, full refund, and provide monthly prepayments from the IRS

  • Child and Care Enhanced Loan: Increase the dollar limit on the loan and eligible expenses, increase the percentage of expenses used to calculate the loan, and increase the income limit for eligibility

  • Expanded Earned Income Tax Credit: Decrease Minimum Age, Eliminate Maximum Age, Increase Dollar and Percentage Limits, Increase Capital Income Limit, and Grant the Choice to Use 2019 Income in lieu of 2021 Income

  • Income Tax Credits: Increased Income Tax Credits under the Affordable Care Act for 2021 and 2022

  • Paid sick leave and family leave: Extension of credits to September 30, 2021, extension of qualifying leave and resetting on qualifying days from March 31, 2021

  • Employee Loyalty Credit: Credit extended until December 31, 2021

  • Pension Provisions: Facilitation for single employer and multi-employer pension plans, expanded amortization for single employer pension plans, and extension of percentage stabilization rates for pension funds for single employer plans

  • Worldwide Interest Allocation: Removal of the provision

Wolters Kluwer Tax Briefing: Wolters Kluwer Tax & Accounting published the Expert Tax Briefing of the American Rescue Act of 2021, which provides additional insight into the laws passed by the US House of Representatives.

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Who: Tax expert Mark Luscombe, JD, LL.M., CPA, Principal Federal Tax Analyst at Wolters Kluwer Tax & Accounting, can help discuss house bills and forecast for legislative enactment.

PLEASE NOTE: The content of this warning was prepared by Wolters Kluwer Tax & Accounting for general informational purposes only. The information is provided with the understanding that Wolters Kluwer Tax & Accounting does not provide any legal, accounting or other professional services.

Contact: To arrange an interview with Mark Luscombe or other tax experts from Wolters Kluwer Tax & Accounting on this or other tax topics, please contact Bart Lipinski.

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