Gateway Tax Service

There are so many tax changes again this year. If you have any tax questions please give me a call and see what we can do.
503-252-4105

If your modified adjusted income (AGI) is less than $150,000, the American Rescue Plan enacted on March 11, 2021 excludes from income up to $10,200 of unemployment compensation paid to you in 2020. For married taxpayers, you and your spouse can each exclude up to $10,200 of unemployment compensation. For example, if you were paid $20,000 of unemployment compensation and your spouse was paid $5,000, report $25,000 on line 7 and report $15,200 on line 8 as a negative amount (in parentheses). The $15,200 excluded from income is $10,200 for you and all of the $5,000 paid to your spouse. If your modified AGI is $150,000 or more, you can’t exclude any unemployment compensation. Use the Unemployment Compensation Exclusion Worksheet to figure your modified AGI and the amount you can exclude.

If you made contributions to a governmental unemployment compensation program or to a governmental paid family leave program and you aren't itemizing deductions, reduce the amount you report on line 7 by those contributions. If you are itemizing deductions, see the instructions on Form 1099-G.

When will I receive the money under the child tax credit?
That's not clear. The goal is to divide the payments into monthly installments, but the Treasury Department may determine that's not possible. It could be quarterly or whatever method is as frequent as possible. But the earliest it's expected to start is in July.

Elaine Maag, a principal research associate in the Urban-Brookings Tax Policy Center, said monthly payments could begin as soon as July but if the government opts for quarterly payments it could take until the fall.

Taxpayers will be able to opt-out of the monthly payments and get a lump sum at tax time like they do now.