The IRS on Monday, April 26, issued adjusted amounts for the child tax credit, the earned income tax credit (EITC) and the premium tax credit (PTC) for 2021 to reflect enacted changes in the American Rescue Plan Act of 2021.
Only for tax years beginning in 2021, Section 9611 of the American Rescue Plan Act increases the refundable portion of the child tax credit to $3,000 for qualifying children who have attained age 6 but not 18 by the end of the 2021 tax year and $3,600 for qualifying children who have not attained age 6.
Section 9621 of the American Rescue Plan Act temporarily modifies the EITC with special rules, including, for example, special rules for eligible individuals with no qualifying children and higher applicable phaseout amounts.
In a permanent provision, Section 9624 of the American Rescue Plan Act modifies Sec. 32(i) to provide that the EITC is not available for taxpayers whose aggregate amount of disqualified investment income exceeds $10,000, an increase from $3,650. Read more.