Coronavirus Stimulus Aid Package

[yos9694]

DDC is OK for day camp (up to age 13) and for pre-school (not including kindergarten)

[Dovdovmoneytree]

Tell me if i'm wrong. The dependent care credit has always been NOT eligible for private school tuition. It is for childcare for non school age children.

I'm not so sure it had to with private school or not. AFAIK (or remember), it was only for childcare, I think kindergarten and up was not included. Day camp (not sleepaway) qualified up to age 13.

[Dovdovmoneytree]

None of this fixes financial inequality, all it does is incentivize staying poor (unless you can magically cross the ever-growing moat to "rich").

Yep, seems the Dems wanna make sure noone ever wants to work again.

[Jellybelly]

Definitely not

Most of us grew up using that word.
Not all of us got it out of their vocabulary yet

[AussieMan]

@Dan Please update that the Child Tax credit is only for US citizens living in the US at least 6 months  while the stimulus is for non US residents also, in order not to create false hopes for our brothers in Israel who read it

Can anyone confirm this.

I read somewhere that although non residents will not get $3600 per child, they will get $2000 refundable not just $1,400

[yesitsme]

Not an accountant- I'm in Finance, but as far as I know Dependent Care is if both spouses work, and only covers after school, babysitters, or summer care.
Used to be up to 35% of $6k if you had 2+ kids, and was non-refundable
In the new bill it's up to 50% of $16k for 2+ kids, and is refundable.

I carpool with some CPA's so I hear some jargon,
Accounting is about the past, finance is about the future

[TBD]

Can anyone confirm this.

I read somewhere that although non residents will not get $3600 per child, they will get $2000 refundable not just $1,400

https://www.congress.gov/117/bills/hr1319/BILLS-117hr1319eas.pdf

[Ephcc90]

Thanks!

Is this right? Haven’t checked the actual bill but seeing reports that there is a clawback if 2021 income is over 120k for MFJ for the ctc advance payment.

[cgr]

Is this right? Haven’t checked the actual bill but seeing reports that there is a clawback if 2021 income is over 120k for MFJ for the ctc advance payment.

A) phaseout starts at 150k
B) in case if an overpayment, if AGI is less than 200% of threshold (300k in this case) there's a 2k safer harbor per child

[Ephcc90]

A) phaseout starts at 150k
B) in case if an overpayment, if AGI is less than 200% of threshold (300k in this case) there's a 2k safer harbor per child

Isn’t it 200% of the “applicable income threshold” which the bill defines as 60k for MFJ? (Could be totally wrong)

[Ephcc90]

Isn’t it 200% of the “applicable income threshold” which the bill defines as 60k for MFJ? (Could be totally wrong)

[cgr]

Isn’t it 200% of the “applicable income threshold” which the bill defines as 60k for MFJ? (Could be totally wrong)

The base 2k credit (now refundable) is available to those earning up to 400k when MFJ.
How do these two add up? Why a safe harbor for those earning up to 120k when you can get it when earning up to 400k?
And how can the safe harbor (120k based on the above) be applicable if there's no phaseout before 150k?

[Ephcc90]

The base 2k credit (now refundable) is available to those earning up to 400k when MFJ.
How do these two add up? Why a safe harbor for those earning up to 120k when you can get it when earning up to 400k?
And how can the safe harbor (120k based on the above) be applicable if there's no phaseout before 150k?

Agree the threshold makes no sense. But it does seem that in a scenario where 2021 income is above 170k but 2020 income was > 150k, you would get the advance credit in July and have to pay it back the excess amount received.

[cgr]

Agree the threshold makes no sense. But it does seem that in a scenario where 2021 income is above 170k but 2020 income was > 150k, you would get the advance credit in July and have to pay it back the excess amount received.

You don't receive an excess of 2k from Jul-Dec, so unless you earned over 400k in 2021, you're not paying back anything- you're just not getting as much additional when filing your return.

[TBD]

The base 2k credit (now refundable) is available to those earning up to 400k when MFJ.
How do these two add up? Why a safe harbor for those earning up to 120k when you can get it when earning up to 400k?
And how can the safe harbor (120k based on the above) be applicable if there's no phaseout before 150k?

Someone who was planning to reside in The US for 6 months but ended up not residing in the USA will be able to use Safe Harbor.

Additional child tax credit depends on earned income

[Jack out of the box]

Would it not be similar to current EITC which foreigners do not get.

The language of the bill is unclear to me.

[Jack out of the box]

@Dan Please update that the Child Tax credit is only for US citizens living in the US at least 6 months  while the stimulus is for non US residents also, in order not to create false hopes for our brothers in Israel who read it

Are you referring to the CTC increase? Or are they removing CTC completely for non-residents?

[Jack out of the box]

Not an accountant- I'm in Finance, but as far as I know Dependent Care is if both spouses work, and only covers after-school, babysitters, or summer care.
Used to be up to 35% of $6k if you had 2+ kids, and was non-refundable
In the new bill it's up to 50% of $16k for 2+ kids, and is refundable.

Covers up to age 13. Includes day camp but not sleepover camp. (Governor Cuomo probably cost the Feds a bunch on this credit for Summer 2020.) Preschool tuition counts for years below Pre 1A (as NYers call it).

[AussieMan]

Are you referring to the CTC increase? Or are they removing CTC completely for non-residents?

I think they increased the old 1,000 CTC (which was fully refundable) to 3,600, and did that only for residents.
Non residents will keep the 2,000 CYC of which 1,400 is refundable.

But I saw somewhere that now the entire 2,000 CTC is refundable and this is even for non residents.
Wondering if this is true or not, from someone who had the time to read all the nuances

The language of the bill is unclear to me.

Unclear to me too.

[cgr]

I just reread the whole bill- apologies if I commented wrongly before.

Stimulus checks- For each $100 in AGI above these limits, all stimulus payments (parents and dependents) are reduced by $28 (so if you have 5 dependents and are MFJ, you lose 7X$28 for each $100 in AGI)

CTC- credit is fully refundable for US residents only
I still can't make sense out of the phaseout- the $2k is available to MFJ earning up to 400k, so ideally there should be no overpayment in advance.
https://www.kiplinger.com/taxes/602378/congress-passes-3000-child-tax-credit-for-2021
How does the section "Phase-Out for Wealthier Parents" jibe with "Some Overpayments Would Not Have to Be Paid Back"?

I think what's not getting nearly enough attention is the healthcare credit.
100% subsidized COBRA through September, with a cap on ACA premiums of 8.5% (and less for those earning less than 400% FPL) for 2021 and 2022.