Does anyone here have multiple children young enough so the child tax credit is in play, while also doing Roth Conversions or planning to do Roth Conversions while children are in that range?
If so I'm wondering if anyone knows of anything already written, or cares to comment, on the effect of the new 2021 tax rules regarding Roth conversions. I'm still playing catch up on what all has changed, but I think that the CTC went from $2K per child (also allowing up to 18 instead of under 17) to $3K per child and is now always refundable, up to certain income thresholds/phaseouts.
I'm looking for comments specifically regarding what seems to be a big loss of "space" at the 0% marginal rate incurred for early retirees (under the threshold) doing Roth Conversions while having little/no other income, but kids under 17. Before the 2021 changes, 3,2,1 kids provided space of $74360, $61,600, $49,060 at a 0% rate. Under the new rules, the space at 0% is only ~ $21,500 and is not effected by number of children (since the credit is always refundable).
I know it's a first world problem to have and the increased credit amounts themselves are a boon. I'm just wondering if any early retirees here had been planning on converting big chunks under the old rules? If so, what are your plans now?
As the tax rules are written now, will the CTC and it's refundable nature revert to old rules after 2021? Or 2022?