Strategic Wealth Designers: Tax credits resulting from the American Rescue Plan

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When the American Rescue Plan was announced we all heard about the additional stimulus checks and unemployment benefits. But what are the tax credits we should be aware of? Fiduciary financial advisor Jordan Schwartz of Strategic Wealth Designers joined us on the newscast to discuss the resulting tax credits from the American Rescue Plan and what you need to know. The child tax credit, earned income tax credit, and child and dependent care tax credit were enhanced by the American Rescue Plan.

“The child tax credit raised the amount per child,” Schwartz says. “It also makes it fully refundable and benefits lower-income households. The earned income tax credit will largely impact workers without kids. The child and dependent tax credit raised the amount of expenses paid that are eligible for a credit.”

The Recovery Rebate Credit allows taxpayers who didn’t claim earlier stimulus they may have missed before. Individuals who already received the full amount of stimulus cannot receive the Recovery Rebate Credit. People may not have received previous stimulus due to missing a tax return from 2019.

“As of right now, these are not permanent,” Schwartz says. “It will apply for when families file their 2021 taxes. After that, these changes will not remain unless Congress votes to extend them or make permanent changes.”

2020 taxes are due on May 17th this year. To see additional stories surrounding business and economic news for Denver area, visit https://KDVR.com/Money and if you have a question for Jordan send an email to info@swdgroup.com.

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