Biden’s ‘Build Back Better’ bill, which is a $1.7 trillion spending plan aimed to help Americans recuperate from the financial repercussions of the pandemic is still aiming to pass the House, but here are 6 tax breaks residents can expect.
First is the expansion of the child tax credit.
The bill plans to increase the amount of the credit to as much as $3,000 per qualifying child aged 6-17 and up to $3,600 for younger children, making it available for qualifying children who turn age 17 in 2021.
Read more: Build Back Better: New Electric Car Buyer Can Receive $12,000 Assistance. Here’s How?
It allows many taxpayers to receive half of the estimated 2021 credit in advance, making it fully refundable for most taxpayers, meaning it is possible for eligible families to get the full credit amount even if they don’t owe any federal income tax
Second, changes on the earned income tax credit (EITC).
It will increase the maximum amount of the credit for workers with no dependents to $1,502 (up from $538 in 2020)
It expands the qualifying age range for eligible workers from ages 25-64 to include young adults (age 19 and older) and seniors.
Read more: How Biden’s $1.75 trillion Build Back Better Plan Could Impact Tax-Paying Americans?
It expands eligibility to families with investment incomes of up to $10,000, indexed for inflation (up from $3,650 in 2020).
The state and local tax deduction.
That law capped the the state and local tax (SALT) deduction at $10,000 per year through 2025. But the Build Back Better Act would make it more valuable again, by raising it to as much as $80,000 through 2031.
Expansion of the premium tax credit.
The Build Back Better Act would expand eligibility for (and increase the amount of) the premium tax credit, a refundable credit that is designed to help lower-income households pay for their health insurance premiums. These changes would last through 2025.
Read more: Build Back Better: A Game Changer Move by Biden Government?
Electric vehicle tax credit.
The House-passed version of the Build Back Better Act would establish a refundable tax credit of up to $8,500 for those who purchase new qualified plug-in electric vehicles that cost up to $80,000.
Extension of the tax credit fo residential energy-efficient property
Currently, the credit is worth as much as 26% of the cost of such upgrades and is available through 2023. The House-passed version of the Build Back Better Act would extend the credit through 2033 and make the credit refundable starting in 2024.
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