Resources

Client Alerts, News Articles, Blog Posts, & Multimedia

Everything you need to know about BMD and the industry.

IMPORTANT UPDATE: IRS Opens Portals for Advanced Child Tax Credit Payments 2021

Client Alert
May 20, 2021

UPDATE

The IRS opened two portals for the Advanced Child Tax Credit payments. Taxpayers who wish to opt-out of the advanced child tax credit payments will need to use the “unenroll from advanced payments” portal. Taxpayers who were not required to file a tax return and have not already submitted his/her information should use the “enter your information” portal to receive the advanced child tax credit payments. The portals can be found at https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021.

May 20, 2021

The American Rescue Plan Act (the “Act”) expands the Child Tax Credit for tax year 2021. In addition to expanding the Child Tax Credit, the Act provides for advance payments of the 2021 Child Tax Credit.

Beginning in July, the IRS will automatically send Advanced Child Tax Credit payments to eligible taxpayers based on their 2020 tax return (or 2019 tax return if the 2020 tax return has not been filed and processed yet). The amount of the advanced payment will be up to $300 each month for each qualifying child under 6 years old at the end of 2021 and $250 each month for each qualifying child between 6 and 17 years old at the end of 2021. For example, if you have 2 qualifying children, one 4 years old and one 8 years old, you may receive up to $550 each month in advance child tax credit payments.

These payments are an advance on the child tax credit a person will claim on his/her 2021 tax return. Therefore, when a person files his/her 2021 tax return, the child tax credit amount will be reduced by the total amount of advance child tax payments received between July and December. That means that you may be required to repay some or all of the advanced child tax credit on your 2021 tax return.

Who is an eligible taxpayer?

Eligible taxpayers are:

  • Married taxpayers filing a joint return or Qualifying Widows with income up to $150,000;
  • Head of Household taxpayers with income up to $112,500; and
  • All other taxpayers with income up to $75,000.

Who is a qualifying child?

A qualifying child is one who:

  • Has a valid social security number
  • Lived with the eligible taxpayer for at least half the year
  • Is related to the eligible taxpayer
  • The eligible taxpayer provides more than 50% of the child’s support

What does this mean?

This means that unless a person opts out, he/she will automatically receive advance child tax credit payments. Therefore, the refund amount you are expecting may be reduced. This also means that parents that alternate claiming a dependent on their tax returns may now owe money to the IRS in 2021 rather than receiving a refund.

In the coming months, the IRS has stated taxpayers will have the opportunity to opt out of the advance child tax credit payments. The IRS has also stated taxpayers will have the opportunity to update information with the IRS such as filing status or number of qualifying children.

For additional questions related to the advance child tax credit payments, please contact BMD Tax Law Attorney Tracy Albanese at tlalbanese@bmdllc.com or (330) 253-9195.

Tax LawTracy L. AlbaneseChild Tax Credit
Client Alert

Returning to Work: Forecasting the New Normal in Business

April 16, 2020We cannot predict when businesses will reopen across the county. As we publish this Alert, dynamic business leaders are cooperating in comprehensive efforts to create safe work environments so that they can all re-engage the workforce. However, we can predict the new normal in business. Some important studies were published yesterday, and the new normal in business will be facemasks for all employees, and probably all business visitors.Client Alert

Updated Guidance on Ohio Department of Medicaid Telehealth Rules During the Covid-19 Public Health Emergency

April 15, 2020In its initial response to the COVID-19 public health emergency, the Ohio Department of Medicaid (“ODM”) issued emergency rule 5160-1-21, which dramatically expanded reimbursable telehealth services, telehealth providers, allowable technology, location of both providers and patients, and covered billing provider types. See BMD’s initial COVID-19 and Telehealth Resource Guide here. This emergency rule provides wide flexibility for patients to receive necessary healthcare services while Ohio’s Stay-At-Home Order remains in place. Regulations are continually changing in response to the public health crisis, and on April 13, 2020, ODM issued new guidance further expanding telehealth services reimbursable under Ohio’s Medicaid program.Client Alert

Essential Businesses during COVID-19: Identification and Operation FAQs

April 14, 2020During the COVID-19 pandemic, the ability to classify your business as “essential” could be the key to its survival. Almost every state in the United States has imposed a “stay-at-home” or “shelter-in-place” order that restricts the types of businesses that can remain open. In fact, as of the writing of this alert, there are only seven states that have not imposed state-wide restrictions on which businesses can stay open during the Coronavirus pandemic and even those states have individual cities and counties that have imposed stricter orders. However, these orders are not always clear, and interpretation is often left to the individual business. This alert will answer some of the most common questions about essential businesses.Client Alert

UPDATE: Exempt Organizations Filing Deadline Extended Until July 15, 2020

April 13, 2020In a recent announcement, the IRS has expanded the deadline for any taxpayers, whether individuals, trusts, estates, corporations, and other non-corporate tax filers, where a filing or payment deadline falls on or after April 1, 2020 and before July 15, 2020. These taxpayers now have until July 15, 2020 to file and pay any federal income tax that is generally due on April 15. The IRS will not assess any late-filing penalty, late-payment penalty, or interest.Client Alert

New IRS Portal for Non-filing Taxpayers to Enter Payment Information & Receive Economic Impact Payments

April 13, 2020The IRS has created a portal for non-filers to enter payment information in order to receive the economic impact payments. This portal is for taxpayer’s who have gross income that does not exceed $12,200 if single and $24,400 if married filing jointly, or were not otherwise required, or plan, to file a tax return for 2019.
Older posts
Newer posts