After much debate in Congress and after Congress passed a $ 1.9 trillion bill to further aid Americans through the effects of the COVID pandemic, President Biden enacted the American Rescue Plan Act of March 11, 2021 In force in 2021. Some of the highlights of the law are as follows:
* For qualified individuals, the government provides direct payments of $ 1,400 per person and $ 2,800 per couple. In addition, they may receive an additional $ 1,400 for every child or other dependent a person has. Some customers have already received these checks. Please check your bank accounts for the deposit of these additional funds.
* The law extends the exclusion of income from student loan allocation until 2025. Typically, any debt that is allocated becomes taxable income for the debtor. However, under this new law, student loan debt relief is not taxable income.
* Up to US $ 10,200 Unemployment Benefit will not be taxable in 2020. This provision can create many complications for the IRS and taxpayers. Since a number of people who have received unemployment benefits may already have filed their 2020 tax returns, they may need to amend that tax return. The IRS will also need to adjust its computer programs to reflect the change in unemployment benefit tax liability. Hopefully this transition will be a smooth process for both taxpayers and the IRS.
* Child and Dependent Tax Credit is increased so Qualifying Family Tax Credit ranges from $ 3,000 to $ 3,600, depending on the age of the child. The law also clarified some points for the paycheck protection program. However, the expiration date has not been extended. The bottom line is that after March 31, unless there is an extension, you will not be able to get a paycheck protection program loan. The law also extended the employee loyalty program until the end of the year.
* The law also expanded various COVID programs for employees including, but not limited to, the Family Medical Leave Credit Program and the Sick Day Program for Employees.
* The new law also provides around $ 350 billion for state and local governments to help with COVID clean-up efforts to offset the loss of tax revenue due to the significant unemployment rate.
* The new law provides $ 50 billion to expand COVID testing and related health issues.
Incidentally, the IRS recently extended the deadline for filing an individual tax return to May 17th, so this year you have a little more time to file your tax return if you haven’t filed one yet.
Please be aware of all of these elements and how they can affect you or your family. Please contact your lawyer or accountant if you have any questions about these matters.
NOTE: This general summary of the law should not be used to solve individual problems, as minor changes in the factual situation may require a material deviation in the applicable legal advice.
Attorney James F. Contini II is a certified specialist in estate planning, fiduciary and estate law at OSBA. He is with Krugliak, Wilkins, Griffiths & Dougherty Co. LPA in New Philadelphia.
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