“The only two certainties in life is death and taxes.”
Ben Franklin
Based on the last few years, I propose a minor edit to the famous Ben Franklin quote:
“The only certainties in life are death and ever-changing tax rules”
The American Rescue Plan Act of 2021 and other recent developments/legislation affect many Americans:
- April 15th isn’t April 15th. Due date filing + payment extended to 5/17. This extension applies to Fed and OR filing and payment. Oregon announced they’re intention to match the 5/17 deadline on 3/25.
- Extended expanded unemployment, the $300 Federal bump, extended through Labor Day 2021.
- Exemption on the first $10,200 of unemployment benefits. This phases out at $150,000 of income per household. For returns filed prior to the announcement of this current guidance from the IRS is to not file Amends. That the IRS will fix on their end and issue refunds.
- $1,400 Stimulus Checks. BIG Bump on the previous rounds of the stimulus checks, however, this expansion of the check, comes with a substantial narrowing of who’s eligible for the check. Previously, the stimulus phased out from $75,000-$100,000 Single and $150,000 to $200,000 Married Filing Joint. The expanded benefits are phased out in a much narrower band, over $5,000 for Single and $10,000 for Married Filing Joint. Please note, if for whatever reason you did not receive the stimulus checks in 2020, but qualify for them based on your 2020 income, please file a return. Same thing in 2021.
- Child Tax Credit BIGGER and Better. The current credit is being extended from $2,000 to $3,000, and even $3,600 for children under the age of 6. This expanded benefit is phased out at the same $75K Single/$150K Married as the $1,400 Stimulus Check. The $2,000 Child Tax Credit remains in effect for taxpayer’s with income in excess of those phaseouts, as well as the income phaseout range at $200,000 and $400,000.
- Advanced payment of this credit. They’re paying half the credit upfront, over the last 6 months of 2021. IRS will send periodic payments from July 2021 to December 2021.
Equally good news, but not in the act is the extension to May 31st, 2021 of the PPP Round 2 deadline. If you can use it, apply. When the first announced PPP, many businesses abstained, whether due to moral reasons, ie, someone else needs it more than me, or due to lack of transparency over how this would be treated. Here’s my take: Take the Money. Harvard, Stanford, The Lakers all got funding under the first round of PPP. Yes, they returned it, but only because they could hear the sounds of a million Americans cobbling our Pinterest-Worthy gallows. Spend the Money. Hire people. Keep people employed and tip your DoorDash Drivers and other service industry people 20-30%. Take care of the people who are taking care of you.
Last bit of good news for this blog post; Oregon is addressing a quirk of the “taxable” Fed stimulus payments by allowing some residents to subtract their federal taxes from their state liability.