Biden Tax Credits for 2020, when to file? ?

   I always like to file my taxes early in the year, typically February. This year, I am hearing Biden will attempt (and likely get through) increase the tax credits per child and that it will be for 2021 only. Normally this would mean I would be expecting that to be on the next years taxes, as in when I file in early 2022 (for 2021) but the stories indicate that the intent is for immediate 2021 pandemic relief and for THIS year? Should I file early, or wait to see what the next Congress enacts? Also, we had another baby in 2020 so thus far the stimulus funds have all used my 2019 taxes with less kids. By filing, and recording updated dependents (new baby), would this make any future stimulus use my increased dependent number worth filing early? 

2 Answers

  • 1 month ago

    Biden is President.  Biden like all Presidents before him do very little law making.

    It's likely that Biden gets what he wants when Congress votes on it.

    However, any change you see that is effective immediately will be a credit towards a following you taxes, just like the previous stimulus payments are a credit on the 2021 taxes.

    When you file your 2020 taxes, that will include your newborn.

    If there is future stimulus payments, then depending on how they are calculated your newborn maybe included.  We don't have crystal balls.

    Did you update your W4 when your newborn was born?  If you did, realize that the W4 released in Jan 1, 2020 puts money in your paycheck not in your tax refund. 

  • 1 month ago

    Biden never said he was going to increase taxes.

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