President Joe Biden signed the American Rescue Plan Act of 2021 on Thursday, March 11. Here’s what you need to know:
- Stimulus Payments: Round 3 – A third stimulus payment (also known as Economic Impact Payments), of $1,400 will be automatically issued to individuals (or $2,800 for married couples), plus an additional $1,400 for each dependent (including adult dependents).
- Unemployment – Weekly unemployment benefits have been extended through September 6, 2021 with a weekly amount of $300. The first $10,200 of unemployment benefits will be nontaxable for taxpayers with an adjusted gross income of less than $150,000. The full $10,200 is taxable for those with adjusted gross incomes of $150,000 and greater.
- Child Tax Credit: The boosted-credit now gives eligible parents $3,600 for each child under the age of 6, and $3,000 for each child under the age of 18 for 2021. The credit is now fully refundable, which means more families will be able to benefit from the credit.
Frequently Asked Questions
*NEW* 2021 Child Tax Credit Expansion
What is the Child Tax Credit?
The Child Tax Credit (CTC) is a tax benefit to help parents, grandparents, siblings, foster parents and others with the costs of raising children. If you meet a few qualifications and are raising a child, you might be able to receive the credit.
What’s new about the Child Tax Credit in 2021?
As part of the 2021 American Rescue Plan, there are temporary changes and expansions to the Child Tax Credit (CTC). These changes include:
- A higher dollar amount per child: You can receive up to $3,600 per child under 6. In previous years, the maximum amount was $2,000 per child.
- No minimum income: Last year, you needed to earn at least $2,500 to receive part of the credit. Now, if you don’t have any income at all, you might still qualify for the credit.
- Age: Children under age 17 (must be 17 by December 31, 2021) might qualify you for the credit, instead of age 16 and under.
- Advance payments: You can receive part of the credit early (this year), and in monthly payments instead of receiving all of the credit at once in 2022.
Am I eligible for the 2021 Child Tax Credit?
There are 3 main criteria to meet to claim the 2021 Child Tax Credit;
- Income: There is no minimum income requirement to claim the new CTC, but you must earn less than $75,000 to receive the maximum amount.
- Social Security Number: You, your spouse (if applicable) and the child you are claiming must have a Social Security Number or an Individual Taxpayer Identification Number (ITIN)
- Children you claim for the CTC must be considered ‘qualifying children,’ which means:
- The child must be your own, your grandchild, stepchild or adopted child; younger sibling, step-sibling or half-sibling or their children; or a foster child placed with you by a government agency.
- They must be 17 years old or younger on December 31, 2021.
- They must live with you for more than half of the year (non-consecutively qualifies).
- They must be considered a dependent for tax filing purposes.
What’s the maximum amount I could qualify for?
Families earning less than $75,000 per year can receive up to $3,000 per qualifying child between the ages of 6 and 17. Those families will receive $3,600 per qualifying child under the age of 6. For those with incomes over $75,000 ($150,000 for married couples), the credit will start to decrease. See how much money you’ll get under the new rules by using the 2021 Child Tax Credit calculator.
How do I claim the new Child Tax Credit and what are advanced payments?
There are two ways to receive the 2021 Child Tax Credit:
- You can receive half of your Child Tax Credit this year and the rest of the credit in 2022 when you file your tax return. The amounts that you receive in 2021 are called “advanced payments,” and will be paid to you between July and December 2021. In order to receive advance payments, you must file a 2020 tax return this year so the IRS can see if you’re eligible.
- If you don’t want to receive the credit early, you can file your 2021 tax return next year (in 2022) and receive the full credit in one lump amount in your refund.
As of May, the IRS is working on an online website for families receiving the CTC where you can choose how you want to receive the credit. You can also change your address and update other tax information.
If it’s your first time filing your taxes or you need help filing, you can:
- Get help from Accounting Aid Society at no cost. Make an appointment by visiting www.accountingaidsociety.org/taxpayers. Please note that Accounting AId Society is currently not scheduling appointments and will begin taking appointments for the summer on May 24, 2021.
- Prepare your own return online using free self preparation programs, which can be found by visiting at www.accountingaidsociety.org/taxpayers.
- Go to a paid preparer, which can be expensive. It’s important to choose your tax preparer wisely because the taxpayer is always legally responsible for what’s on their tax return. Luckily, there are steps you can take there are steps you can take to make sure your return is filed correctly by an experienced and trustworthy preparer: Ten Tips for Choosing a Tax Preparer
Common Filing Questions
How do I know if I need to file a Federal tax return?
Not everyone is required to file a tax return. The IRS has an easy-to-use online tool to help you determine if you have federal filing requirements or not. However, you might want to file a state tax return to collect refundable state credits such as the Home Heating Credit and Homestead Property Credit even if you don’t have to file a federal tax return.
When do I have to file my taxes?
If you have a federal filing requirement, your return must be filed by April 15, 2021. Your State of Michigan income tax return must also be filed by that date.
Where can I find a copy of an old tax return?
You can get some data, such as your adjusted gross income by requesting a tax transcript, which is free, but NOT the same as a photocopy of your tax return. If you need a photocopy, check with your tax preparer or the tax software you used. If all else fails, you can fill out the IRS Form 4506.
When is the deadline for submitting my Home Heating Credit form?
September 30, 2021.
When will I get my refund?
The IRS began accepting and processing returns on February 12, 2021. If your return is complete and accurate, usually refunds are issued in about 6-8 weeks from the date the IRS receives your return. If you file your return electronically, your refund should be issued in around 3 weeks, and even faster if you choose to directly deposit your refund.
I got a notice from the IRS – how do I know it’s not a scam?
The IRS only sends notices in the mail. The IRS will NOT contact you through email, social media or text message to request personal information. If you receive something through these channels claiming to be the IRS or Treasury, do not initiate contact and report it to firstname.lastname@example.org.
If you received a letter and you believe your letter looks or sounds suspicious, you can verify your IRS notice here. If nothing comes up, you can contact the IRS at 800-829-1040.
What do I do if I receive a notice from the IRS?
Don’t panic! Most notices are about tax returns or accounts, but sometimes, they aren’t aren’t bringing you bad news (you might learn you’re getting a larger refund) and you don’t need to do anything. Othertimes, the letter will request a response by a specific date, and you’ll want to comply.
First, verify your IRS notice here. If the IRS note is legitimate, there will be instructions on how to respond. If you disagree with the notice, are unable to comply or still aren’t sure how to respond, we may be able to help you. To learn more and to see if you qualify for help, visit: accountingaidsociety.org/low-income-taxpayer-clinic
What do I do if I owe taxes but can’t pay?
It’s best to pay the amount you owe, or pay as much as possible because you’ll be charged an interest and penalty on any money you owe. Pay what you can before the deadline, then look at the different payment options that the IRS provides by visiting irs.gov/payments.
Stimulus Payment Questions
What are stimulus payments?
Stimulus payments – also known as ‘Economic Impact Payments,’ ‘stimulus checks,’ or ‘ recovery rebates’ are part of the Coronavirus Aid Relief and Economic Security (CARES) Act legislation to help reduce financial hardship of COVID-19. The IRS and Treasury department issued 2 rounds of stimulus payments to eligible recipients: 1 $1,200 ($2,400 for married couples) payment in the spring of 2020, and a second round of $600 ($1,200 for married couples) that began going out on Dec. 29, 2020.
What is the Recovery Rebate Credit?
The Recovery Rebate Credit is a benefit for people who didn’t receive a stimulus payment but are eligible, or didn’t get the full amount to which they are owed. Eligible people can claim the Recovery Rebate Credit by filing a 2020 tax federal tax return.
If you’re not required to file a tax return, you might still qualify for a Recovery Rebate Credit. If you do, you’ll need to file a 2020 federal tax return – even if you have little to no income, are incarcerated or experiencing homelessness.
How much is the third stimulus payment?
Eligible filers will automatically receive stimulus payments (also known as Economic Impact Payments) of up to $1,400 for individuals and $2,800 for married couples, with an additional $1,400 for dependents claimed on a tax return (including adult dependents). The eligibility requirements for the third stimulus payment are the same as the second round.
Will I get a stimulus payment?
You’ll most likely get the full stimulus Payment if you meet the following requirements:
- Your adjusted gross income (AGI) is under $75,000 (for single or married filing separately, or $150,000 (if married filing jointly),
- You have a valid Social Security Number
- You cannot be claimed as a dependent on someone else’s tax return
- You are a U.S citizen, permanent resident or qualifying resident alien.
How do I get my payment?
If you’ve filed a tax return in 2018 or 2019, you don’t need to do anything. The IRS will automatically send your payment using the information you provided on your tax return. The payment will be directly deposited to the bank account listed on your return. If you did not provide direct deposit information, the payment will be mailed to the address on your return.
If you receive Social Security, including Social Security Disability Insurance (SSDI) Railroad Retirement benefits, Social Security Insurance (SSI), or Veterans Affairs benefits, you will also receive a payment automatically.
I got my stimulus check on a debit card, and lost it or threw it out. What do I do?
You can request a replacement by calling 800-240-8100.our card will arrive in a plain envelope labeled “Money Network Cardholder Services” and will be issued by “Meta Bank, N.A.” The envelope will include instructions to activate the card, information on fees, and a note from the U.S. Treasury.
How do I check the status of my payment?
Check the status of your Economic Impact Payment here.
Where can I find my Adjusted Gross Income (AGI)?
- On your 2019 tax return, your AGI can be found on line 8b of Form 1040 or Form 1040-SR.
- On your 2018 tax return, your AGI can be found on line 7 of the Form 1040.
Does someone who died qualify for an Economic Impact Payment?
No. An Economic Impact Payment made to someone who has passed away before receiving the payment should be returned to the IRS.
What should I do to return an Economic Impact Payment to the IRS?
If the payment was a paper check, write “void” in the endorsement section on the back of the check. Mail the voided check, along with a written note stating your reason for returning the check (do not bend, staple or paperclip the check).
If the payment was a paper check and you have cashed it OR if the payment was a direct deposit, write a personal check or money order made payable to the U.S. Treasury. Write “2020EIP” and the social security number or individual taxpayer identification number of the recipient of the check on the memo line. Mail the personal check or money order along with a written note stating your reason for returning the payment.
If you live in Michigan, mail your items to:
Kansas City Internal Revenue Service
333 W Pershing Rd.
Kansas City, MO 64108
If you live in a different state, you can find the appropriate mailing address under Q54 here.
Tax Assistance Program Questions
How do I get my taxes prepared by Accounting Aid Society?
In 2021, we have two options for tax preparation for eligible households:
- Stay home and submit your tax documents electronically using your smartphone through VITA ACE. You’ll need an email address, smartphone with internet access or data plan. Taxes are prepared at a later time, and we’ll call you when your return is ready to be reviewed and filed.
- Save time and bring your documents to a Drop-and-Go site to have them scanned, and answer a few questions and review your information with an Accounting Aid specialist (this usually takes 30 minutes, but can take longer depending on your situation). Taxes are prepared at a later time, and you’ll receive a call when your tax return is ready to be filed.
An appointment is required for both VITA ACE and Drop-and-Go. For Drop-and-Go, we cannot accommodate walk-ins and cannot accept your tax documents or begin to prepare your returns without going over your information with you first.
Do I qualify for free tax preparation?
Tax preparation is available for most families and individuals with incomes up to $57,000
How do I make a tax preparation appointment with Accounting Aid Society?
An appointment is required for ALL tax services (Drop-and-Go and VITA ACE). The quickest and easiest way to schedule an appointment is by going online. We schedule appointments 2 weeks in advance, and add new appointments everyday by 9:00am. If you don’t see an appointment online, we encourage you to checkback to look for new appointment availability.
You can also schedule an appointment by calling (313) 556 – 1920, Monday through Friday from 9am-4pm. However, wait times currently exceed 25 minutes and appointment availability is not guaranteed over the phone.
What do I do if I can’t get an appointment?
Bear with us! We currently schedule 2 weeks out, and add new appointments to our system every weekday by 9am. Here are a few options:
- Continue to check the appointment system. Appointments go fast, so the earlier you check, the better chance you’ll have.
- Prepare your own taxes online using IRS Free File software, which can be accessed here.
- Consider making an appointment later in the season. We’re open, and available to help year-round.
- Follow us on Facebook to stay up to date on important information and announcements.
What if I have a question or issue with my return after tax season is over?
Accounting Aid is open year-round to make sure we’re here for any questions, concerns or issues that might arise after tax season. We also prepare taxes year-round for those who are able to file after April 15, missed the deadline, filed an extension, or wish to file prior year returns.
What documents do I need to have for my tax appointment with Accounting AId Society?
View our Tax Prep Checklist for a list of documents you’ll need for your appointment. It’s important to make sure you have all of your requirement documents to be able to have your taxes prepared.
Online Self-preparation Questions
What is online self-preparation?
Online self-preparation, like the IRS Free File Program delivered by TurboTax and MyFreeTaxes delivered by United Way Worldwide, allows you to prepare your own taxes using easy-to-use, IRS-approved online software. You’ll be guided through a series of questions that affect your tax situation and based on your answers, the calculations and forms are filled out for you, so you can receive your maximum refund. If you’re unsure how to answer a question, support is available through an online chat and via telephone.
Why would I want to use online self-preparation?
- It’s convenient: File your taxes anywhere you feel comfortable using the internet – your desk, couch, car or even your doctor’s waiting room. Use your smartphone, tablet, laptop or desktop computer.
- You can save time: No appointment is needed. Bypass the line and file anytime/ You can even save your work and revisit it later. If you’re owed a refund, you’ll find out your refund amount even before you file.
- It’s secure: Both the MyFreeTaxes and TurboTax software use some of the highest industry standards to safeguard your information. It uses
- It’s easy to use: MyFreeTaxes and TurboTax both use step-by-step guidance and tell you what you need to enter based on your unique situation. All of the calculations are done for you behind the scenes, and if you get stuck, there’s plenty of support options available.
- You can learn about your taxes: Softwares offer personalized and easy-to-understand explanations of calculations, deductions and credits.
- Guaranteed accuracy and maximum refund: Both MyFreeTaxes and TurboTax guarantee 100% accuracy and maximum refund amount possible. The programs run several error checks and double-check your return before its file. If there is a mistake, both softwares promise to reimburse you for any penalties or interest.
What is the income limit for the IRS Free File Program delivered by TuboTax?
The IRS Free File Program delivered by TurboTax helps people file their taxes for free if:
- Their adjusted gross income (AGI) is $39,000 or less OR
- They were active duty military in 2020 with an AGI of $72,000 or less OR
- They qualify for the Earned Income Tax Credit.
Learn more about the IRS Free File Program delivered by TurboTax and get started here.
What is the income limit for MyFreeTaxes delivered by United Way?
MyFreeTaxes has no income limit for the 2020 tax year. The best way to guarantee you won’t be charged is by starting at www.MyFreeTaxes.com, selecting the ‘file myself’ option, and using the link emailed to access the Taxslayer Software. If you navigate to the TaxSlayer software directly, or use another link from another website, you may accidentally access one of TaxSlayer’s paid products.
MyFreeTaxes includes the same federal and state forms offered in most major tax filing platforms. View the complete list of forms here.
Learn more about MyFreeTaxes and get started here.
Additional online self-preparation resources:
Low Income Taxpayer Clinic Questions
What kind of tax problems can you help me resolve?
Tax problems can be expensive and confusing if you don’t have the right help. Accounting Aid Society’s Low Income Taxpayer Clinic can help eligible taxpayers respond to IRS notices or provide other legal support with tax issues at no cost.
If you’re eligible, we can help you if:
- You got a notice or letter from the IRS
- You need legal help in US tax court
- Your property has been taken to settle a tax debt
- The IRS has denied you the Earned Income Tax Credit
- You need help with an Injured or Innocent Spouse Claim
- Your don’t believe you owe the amount of money the IRS is asking you to pay
- You need to settle a tax debt
- Your identity has been stolen
- You are being audited
- You need to help setting up a payment plan with the IRS
Do I qualify?
You can find out if you qualify for tax resolution help by clicking here.
Do you provide tax help in different languages?
Yes! We have tax preparers that can speak a variety of languages, including, but not limited to Spanish and Arabic.
- Where’s My Refund? an online tool that will allow you to track the status of your refund. To do so, you’ll need your Social Security Number of Individual Taxpayer Identification Number, filing status, and exact refund amount. Typically, your status will be available 24 hours after e-filing or 4 weeks after you mailed your return.
- IRS2Go Mobile App – the official mobile app of the IRS that allows you to check your refund, make a payment, find free tax preparation assistance and sign up for tax tips and information.
- The Michigan COVID-19 Pandemic Resource Guide -information on programs aimed at supporting Michigan residents during the coronavirus pandemic, with a special section for programs serving Detroit residents
- DTE Energy is extending shut-off protections, offering billing assistance and sharing energy savings tips to help during the pandemic. Visit DTE’s website to learn more and reach out directly with your questions and concerns.
- Scams – If you receive calls, emails, text messages or any form of communication claiming to be from the Treasury Department, IRS or government offering coronavirus grants or payments in exchange for personal financial information or for a fee, do not respond. These are scams. Report scam attempts here.
- BCBSM Tool Kit – To help communities inform their residents about the coronavirus, Blue Cross Blue Shield of Michigan developed an online tool kit that provides resources and comprehensive information about COVID-19 symptoms, prevention and protection. Some of these resources include food relief, health and wellness, and mental health assistance.