COVID-19 Resources

COVID-19 Legislative, Regulatory Updates

Child Tax Credit – American Rescue Plan Act of 2021

updated 7/5/21

As part of the American Rescue Plan Act of 2021, significant changes are coming to the child tax credit rules designed to benefit many American families. About 39 million families are eligible to receive advance payments, starting July 15, 2021.

Sources: The Wall Street Journal (Richard Rubin), CNET on MSN (Katie Conner), IRS

The child tax credit is a federal benefit that reduces income tax liability for people with children. It was created in 1997 and since then has expanded several times. It is a credit that reduces taxes owed as opposed to a deduction that reduces taxable income. The temporary changes in effect for 2021 make it a near-universal monthly child allowance, far from the annual tax break it started as. The changes came about as part of the $1.9 trillion Covid-19 stimulus bill passed in March

How big is the credit?

Until 2021, the credit was $2,000 per child under age 17, based on the child’s age at the end of the year. For 2021 only, Congress increased the credit to $3,000 for children ages 6 to 17 and $3,600 for children under age 6.

Are there limits based on income?

On the low end, there were limits, but they have been removed for this year. Until 2021, low-income households that didn’t owe income taxes could get up to $1,400 of the $2,000 credit. This year, however, they can get the full credit even if they have no income.

On the high end, some limits are still in place. The expanded portion of the credit starts phasing out once income reaches $75,000 for individuals, $112,500 for heads of household and $150,000 for married couples. The base $2,000 credit for higher-income households remains, and that phases out once income reaches $200,000 for individuals and $400,000 for married couples.

When do the monthly payments start?

The Internal Revenue Service will make the first payments on July 15. They will continue monthly for the rest of the year on the 15th of every month unless that falls on a holiday or weekend.

How big will the payments be?

Each month, households will get one-twelfth of the annual credit, so they will generally have half the credit by the end of 2021 and get the rest on the 2021 tax return they will file in early 2022. So, a single parent who makes $60,000 and has an 8-year-old would get $250 a month starting in July.

How many people are getting the payments? And what does it cost?

The payments will go to about 39 million households, covering 88% of U.S. children, according to the Treasury Department. The expanded credit is costing the government just over $100 billion this year.

Why is the government making monthly payments?

Advocates for the expansion say the program can be more effective in helping parents and children if they have the money sooner rather than waiting to file a tax return to get it.

Will the payments reduce people’s expected tax refunds?

Perhaps. A household that was expecting to use the $2,000 credit against its 2021 tax liability in early 2022 will instead get $1,000 during the second half of 2021 and only have $1,000 more on the return.

That may be less of a concern for some households because of the expanded size of the credit and because only half of it is coming in advance through the monthly payments. So, a married couple making $120,000 with a 3-year-old and a 9-year-old would have normally expected to have a $4,000 child tax credit on the tax return. Now, they will get $3,300 during 2021 and will have the other $3,300 on the tax return.

The IRS will send people notices at the end of the year that they can use when reconciling the payments with the ultimate credit.

Do you have to do anything to get the monthly payments?

In most cases, no. The IRS will use information from 2019 or 2020 tax returns to establish eligibility and make payments. About 80% of recipients have direct-deposit information on file with the IRS and will get the payments automatically. Others will receive paper checks or debit cards.

What happens to the credit after 2021?

If Congress does nothing, the monthly payments go away, and the credit returns to $2,000 per child under 17.

Child tax credit for $3,600: Calculate how much money you’ll actually get

Of course, not everyone will get $3,600. Here’s how much to expect, and when:

Child tax credit for $3,600: Calculate how much money you’ll actually get – CNET

Advance Child Tax Credit Payments in 2021

Advance Child Tax Credit Payments in 2021 | Internal Revenue Service (irs.gov)

Repayment Option for CARES Act Distributions

updated 4/30/21

The Coronavirus Aid, Relief, and Economic Security Act (‘CARES Act’) was signed into law on March 27, 2020 and created a new emergency retirement plan distribution option called the coronavirus related distribution (‘CRD’).   A CRD was available to eligible participants from their PCA Retirement Plan accounts beginning on January 1, 2020 and ending on December 30, 2020.   These special distributions could be taken in any amount up to $100,000 and the usual 10% penalty tax was waived.

If you took a CRD from your account in 2020, you can avoid a potential tax hit by putting some or all of the CRD back in your account within three years from the date you took the distribution.

• Read More
• Download CARES Act Distribution Repayment Form

Stimulus Package, Part 3: The American Rescue Plan 

updated 3/16/21

On Friday, March 11, President Biden signed the $1.9 trillion-dollar American Rescue Plan Act of 2021 into law. This third iteration of fiscal spending associated with the pandemic is the second largest since the CARES Act was signed into law in March of last year. Whether you agree or disagree with the need, the details, or the amount, this Act contains a tremendous amount of stimulus funding and many economists state it will ‘turbo-charge’ the economy as the elements, including direct payments to individuals, ‘ripple’ throughout the nation.

• Read Summary

Consolidated Appropriatons Act of 2021

updated 1/15/21

On December 27, 2020, President Trump signed the Consolidated Appropriations Act of 2021  (“CAA” or “Act”), which included an additional $900 billion in stimulus efforts tied to the COVID-19 pandemic, into law. There are a number of provisions in the Act that are important to nonprofit organizations, including churches, church-related or private religious schools, and private higher education institutions within the 5,593-page Act.

• Learn More

Coronavirus Preparedness and Response Act (CPRSA)

updated 3/6/20

The CPRSA Provides emergency funding for federal agencies including the CDC, FDA, NIH, the State Department, SBA, and the USAID.

• CPRSA Summary

Families First Coronavirus Response Act (FFCRA)

updated 8/31/20

The FFCRA requires employers (including churches and related orgs) to provide paid sick leave for employees and provides payroll tax credits to employers to pay for the sick leave and for family and medical leave resulting from COVID-19.

• DOL FFCRA Employer Requirements for Paid Leave
• DOL FFCRA Employee Rights in Paid Leave
• DOL FFCRA FAQs
• Field Assistance Bulletin No. 2020-1
• CapinCrouse FFCRA Summary
• RBI Summary of FFCRA Provisions
• FFCRA FAQs – 4/11/20
• FFCRA FAQs for tax credits related to paid leave – 4/17/20
• FFRCA Sample Paid Sick Leave & Emergency Family & Medical Return To Work Form – 4/28/20
• FFCRA Sample Emergency Paid Sick Leave and Emergency Family and Medical Leave Request Form 4/28/20
• FFCRA – Updated FAQs – 8/31/20

Coronavirus Aid, Relief & Economic Security Act (CARES Act*)

updated 8/26/20

*includes Paycheck Protection Program (PPP)

The CARES Act provides a multitude of assistance to churches and their employees, including the following: Payroll Tax Relief, Pandemic Unemployment Assistance Program, Paycheck Protection Program, Charitable Contribution Incentives and Retirement Plan Enhancements.  To determine how the Paycheck Protection Program can be helpful to your church read our Summary or watch our Video.

• PPP Loan Guidance – Interim Final Rule
• SBA – FAQs about Faith Based Organizations
• Most active lenders of loans offered through PPP
• US Treasury’s FAQs re PPP
• ECFA CARES Act Summary including PPP
• CapinCrouse CARES Act Summary including PPP
• RBI Summary of PPP Provisions
• CARES Act – Important Retirement Plan Changes – 4/13/20
• CARES Act Employer Payroll Deferral Guidance – 4/14/20
• CARES Act Pandemic Emergency Unemployment Compensation Program – 4/14/20
  
• PPP Interim Final Rule Additional Eligibility Criteria & Requirements for Certain Pledges of Loans – 4/14/20
  
• PPP Senator letter to SBA on behalf of Faith Based Organizations – 4/14/20
• PPP Increase Act of 2020 Summary – 4/21/20
• PPP Increase Act of 2020 – 4/21/20
• PPP Housing Allowance Guidance – 4/24/20
• CARES Act Retention Credit FAQs – 4/29/20
• PPP How to Account for PPP Loans (Capin Crouse) – 5/1/20
• PPP FAQs – 5/5/20
• CARES Coronavirus-related relief for Retirement Plans Q&As – 5/4/20
• PPP Loan Forgiveness Application – 5/15/20
• PPP Flexibility Act Act of 2020 is passed – 6/5/20
• PPP Lender Application Form Revised – 6/11/20
• PPP Borrower Application Form Revised – 6/11/20
• PPP Revisions to First Interim Rule for PPP Loans – 6/11/20
• PPP Loan Forgiveness Application Revised – 6/17/20
• PPP Loan Forgiveness Application 3508EZ – 6/17/20
• PPP Revisions to Third and Six Interim Rules – 6/17/20
• CARES Guidance for Corona Virus Related Distributions & Loans – 6/19/20
• PPP How to Calculate Maximum Loan Amounts – By Business Type – 6/26/20
• PPP Loan Forgiveness – A Summary of Guidance BMW&L – 7/21/20
• PPP Loan Forgiveness FAQs – 8/4/20
• PPP- Interim Final Rule on the Treatment of Owners and Forgiveness of Certain Nonpayroll Costs – 8/26/20

Other COVID-19 Related Information

updated 8/31/20

• RBI Relief 2X Match Program
• Adding Direct Deposit information for Stimulus Rebate Payment – 4/13/20
• Notice 2020-23 (Extended Filing Deadline for Form 990) – 4/15/20
• Employer Guide to Addressing COVID -19 4/28/20
• COVID-19 State Matrix (State Mandated Short Term Leave) – 8/25/20
• IRS Memorandum on Deferring Payroll Tax Obligations through 12/31/20 – 8/31/20

RBI COVID-19 Related Communications