Stimulus Payments

This could be another challenging tax season for the IRS and taxpayers. Although this year’s filing season opens on January 24, 2022 (i.e., it is the first day the IRS will accept and start processing 2021 returns), the Service still has a backlog of prior year returns to process and is plagued by staff shortages due to the pandemic and reduced funding in the last few years.

Early in 2021, Congress passed the American Rescue Plan Act which included a provision that increased the child tax credit amount and upped the age limit of eligible children. Under ARPA, the maximum amount for the Child Tax Credit (CTC) was increased from $2,000 to $3,600 for each child 5 years old and under. For children ages 6 - 17, the maximum increased to $3,000.

The American Rescue Plan Act of 2021 is now a done deal. Among the items of greatest interest to most Americans is a third round of stimulus checks — or IRS “recovery rebates”— of up to $1,400 for every “eligible individual.”

That’s the quick take, but what’s the fine print?