There is a special tax provision which will allow more Americans to deduct up to $600 in cash donations to qualifying charities on their 2021 federal income tax return.
Individuals can claim a deduction of up to $300 and married couples filing jointly can claim a deduction up to $600 for cash contributions made to qualifying charities.
Ordinarily, only taxpayers who itemize deductions may deduct charitable contributions on their federal tax returns. However, the CARES Act allows many taxpayers who do not itemize to claim a deduction on their 2021 federal income tax returns for cash contributions made to qualifying charitable organizations.
IRS Mailing Letters to Advance Child Tax Credit Recipients
In January 2022, the IRS will send you Letter 6419 to provide the total amount of advance Child Tax Credit payments that were disbursed to you during 2021.
Please keep this letter with your tax records. You will need to provide this letter to your tax professional to prepare your 2021 tax return!
To register and access your account, you will need:
- A mobile phone or device that can receive a security code text to login after completing registration. For security purposes you will need your username, password, and security text to access your account.
- A financial account number linked your name such as the last 8 digits of Visa, Mastercard, or Discover Credit Card, Student loan, Mortgage/Home Equity Loan or Auto Loan.
Once you have registered here is what you have access to:
- View Your Balance
- Payment Plans
- Make and View Payments
- Access Tax Records
- View select IRS notices
- View your Economic Impact Payments
Child Tax Credit 2021 - American Rescue Plan
Important changes to the Child Tax Credit under the American Rescue Plan will help many families receive an increased credit along with advance payments of the credit beginning this summer. These changes apply to tax year 2021 only.
The maximum Child Tax Credit will be increased to $3,000 per child ages 6 through 17 (must be this age on December 31, 2021) and $3,600 for each child under the age of 6.
The maximum credit is available to taxpayers with Modified Adjusted Gross Income (MAGI) of:
<=$75,000 single taxpayers
<=$112,500 head of household taxpayers
<=$150,000 married couples filing a joint tax return and qualified widow(er)s
The maximum credit is phased out for taxpayers with MAGI above these levels. The credit is fully refundable for 2021.
The IRS will pay half the total credit amount via advance monthly payments beginning July 15. Unless no action is taken by the taxpayer, this advance of the 2021 credit will be based on your most recently filed return data. You will claim the remainder of your credit allowable based on actual 2021 data when you file your 2021 income tax return.
The IRS is in the process of launching two online portals to assist with the child tax credit rollout.
- Advance Monthly Payment Opt Out Tool - This portal may be used to opt out of receiving the advance monthly child tax credit payments. This would result in a taxpayer receiving the full credit when the 2021 tax return is filed instead of partial payments through December.
-Non-Filer Sign Up Tool - This portal may be used by persons who are not required to file a 2020 Tax Return.
