The proposed next round of tax-related stimulus changes is up
here. Some highlights:
New individual stimulus checks.* $1,400 for single people, $2,800 for married filing jointly.
* Add $1,400 per dependent of any age.
* Phases out in the $75-100k AGI range for single people, $112.5k-150k for head of household, $150k-200k for joint filers.
* Must supply a social security number on your return to qualify...unless you're in the military and married to someone without one. That's weird.
* Written as a credit against 2021 taxes with advance payments based on 2019 income (or 2020 income, if you file before the payments go out). A subsequent round of advance payments would go out, after the 2020 tax filing deadline, to taxpayers whose income declined in 2020 compared to 2019, and would have received a bigger payment based on 2020 income.
Child tax credit. All changes would apply to 2021 only, though many Democrats have stated an intention to push to make these changes apply to future years as well.
* 17-year-olds would count.
* The credit would be $3,600 for kids under 6 at the end of the year, $3,000 otherwise.
* The increased credit amount would phase out at 5˘ on the dollar for income over $75k (single), $112.5k (head of household), $150k (joint).
* Monthly advance payments of this credit would be sent out based on most recent filed tax return (and would be updated mid-year after people file their next tax return). There would be a website to allow people to opt out of the advance payments (if they'd rather use it to offset other tax liability) or report a change in the number of qualifying children, change in marital status, change in income, etc. Any difference between the advance payment and actual credit would generally be trued up at tax time.
Earned income credit.Changes for 2021 only include:
* Lowering the minimum age for the credit (24 for students, 18 for former foster kids and homeless youth, 19 for others),
* Eliminating the maximum age for the credit,
* Increasing the credit for filers without children, and
* Allowing taxpayers to elect to use their 2019 earned income to calculate the EIC if their earned income declined from 2019 to 2021.
Indefinite changes include:
* The amount of allowed investment income would increase to $10,000 (currently $3,650), and would adjust upward for inflation every year.
* The EIC would now apply in US territories.
Child/dependent care credit. Changes for 2021 only.
* Maximum cost of care considered for the credit would increase to $8,000/$16,000 (currently $3,000/$6,000).
* Credit would start at 50% of the cost of care and decrease for taxpayers with AGI over $125k (currently 35%/$15k).
* The credit is currently available at 20% for people with any income; it would now phase out below 20% at incomes over $400k, disappearing entirely at $480k.
* The credit would be refundable.
ACA premium tax credits.* For 2021 and 2022 only, tax credits would increase for people who currently qualify for them. This includes $0 (net) silver plans for people below 150% of the poverty line.
* For 2021 and 2022 only, the cliff at 400% of the poverty line would be eliminated. Tax credits would bring the net cost of the second-cheapest silver plan to 8.5% of MAGI for folks over 400%.
* For 2021 only, people who receive unemployment compensation would be treated as having income at 133% of the poverty level for the purposes of this tax credit.
Other changes* Limits on dependent care FSAs would increase for 2021 only.
* Credits to businesses for COVID-related sick leave and family leave would be extended and expanded to include time off for vaccination (including recovery from side effects).
* The employee retention credit would be available for all of 2021 (currently only available for the first half of the year), at the new rate of 70% of the first $10k of wages per employee per quarter.
* Restaurant revitalization grants would be exempt from tax.