Highlights of New Provisions
During tax year 2021, Congress approved the 3rd Economic Impact Payment (EIP #3) and paid it to over 90% of the eligible taxpayers. Taxpayers who did not receive their payment can claim it as a Recovery Rebate Credit on their 2021 tax returns.
The child tax credit was expanded for US Citizens who are domestic residents. This required a major redesign of the Form 8812 to compute the allowable child tax credit for domestic and foreign residents. The Additional Child Tax Credit for foreign residents is the same as in 2020, $1,400 refundable credit per child. The age limit was increased by one year. Children under age 18 are eligible for the additional child tax credit.
The IRS plans to continue examining crypto currency transactions in search of under-reporters.
There are credits for sick and family leave for certain self-employed individuals involved in caring for family members with COVID. The legislation provided for expanded child-care assistance for 2021.
Changes have been made to the Earned Income Credit for US citizens who are domestic residents.
To read about additional updates relating to tax year 2022 please refer to the link www.ardcpa.com/2022taxupdate.pdf