Louis Divorce Mediation ~ Online and In-Person Mediation in Chicago
  • Home
  • About David
    • Approach & Background
    • David Louis' Personal Story
    • Professional Experience
    • Training Log
  • Benefits of Mediation
  • How Mediation Works
    • Divorce Mediation Process and Outcomes
    • Financial Analysis
    • Parenting Plan
  • Resources
  • Blog
  • Contact
Picture

David’​s Blog

American Rescue Plan Act of 2021

3/12/2021

0 Comments

 
Picture
In an effort to address the economic impacts of the Coronavirus pandemic, Congress has approved and President Biden has signed the American Rescue Plan Act of 2021.

Among the many provisions of this act, there are some that are particularly relevant for divorce mediation clients who are negotiating taxes.

What You Should Know
  1. A new round of stimulus payments (full amount) will be sent out to taxpayers who have Adjusted Gross Income of less than: a) $150,000 per year (if filing jointly). b) $112,500 per year (if filing as head of household). c)  $75,000 per year (if filing as single). Lesser amounts are paid for joint incomes between $150,000 and $160,000, heads of household incomes between $112,500 and $120,000, and single taxpayers with incomes between $75,000 and $80,000. The full amount of the stimulus payment will be $2,800 for those filing joint returns, $1,400 for those filing as single or head of household, plus $1,400 per dependent child. Unlike previous stimulus payments, dependent children can include college age children who are still supported by parents.
  2. The child tax credit for 2021 will be substantially increased from $2,000 per child to $3,000 per child. (And for children 5 and under, the credit is $3,600.) The child tax credit will also be available in 2021 for children up to age 17. (This used to end at age 16.) The increased child tax credit phases out at income of $75,000 ($150,000 for joint returns).
  3. The child tax credit will be fully refundable. This means that, for single parents who have a low tax liability, they can receive the full amount of the child tax credit. This is a big change, since previously, in negotiating which parent claimed children, the parent with a lower income may have decided to let the other parent claim the child(ren) since the other parent would get the full tax benefit.
  4. Health insurance costs under the government health insurance exchange will be capped at 8.5 percent of income through 2022.
  5. The maximum credit for dependent care (i.e., child care) will be increased for taxpayers with incomes up to $125,000.  

Timing
Some of these changes will only be in effect for 2021, unless extended by Congress.

Overall, for many divorcing couples with children who are facing the economic challenges of transitioning from one household to two, the American Rescue Plan Act of 2021 should provide significant short-term economic relief.

Overall, for many divorcing couples with children who are facing the economic challenges of transitioning from one household to two, the American Rescue Plan Act of 2021 should provide significant short-term economic relief.
​
As with all decisions involving taxes, consulting a tax professional is encouraged.

0 Comments



Leave a Reply.

    Contact David

    Archives

    November 2023
    September 2023
    April 2023
    March 2023
    February 2023
    January 2023
    December 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020

    Categories

    All

    RSS Feed

David Louis, MPA, CDFA®   •   Louis Mediation Services   •   Chicago
Picture
[email protected]
3838 N Ravenswood Ave., Suite 257, Chicago, IL  60613
Picture
(773) 633-0256
Copyright © 2025
  • Home
  • About David
    • Approach & Background
    • David Louis' Personal Story
    • Professional Experience
    • Training Log
  • Benefits of Mediation
  • How Mediation Works
    • Divorce Mediation Process and Outcomes
    • Financial Analysis
    • Parenting Plan
  • Resources
  • Blog
  • Contact