Hey all,
We find ourselves in the (enviable, I'll admit it) situation of being right on the threshold for the phaseout of both the 2021 recovery payments and child tax credit as passed by the Senate on Saturday, and assumably to be passed by the House and signed into law this week, unless disaster strikes.
We intentionally delayed filing our 2020 taxes while this was being hammered out, and our patience is going to be rewarded; while our AGI in 2019 was eligible for the full amount, our 2020 AGI would have completely cut us off from payments (just over $160,000 joint).
The child tax credit has a broader phaseout. The text of the law is to have a monthly payout of half the credit over the last half of the year, using the same method of "use 2020 data if available, else 2019, no repayment of overpayment required".
I understand there are a lot of unknowns here, especially around timing and when exactly they would be looking at the data for the purpose of calculating the payments, but I'll ask anyway for the experts out there -- would it makes sense to file for an extension and wait until October to file our 2020 returns? Are there any potential downfalls to doing that? Conversely -- since we don't owe, would it be beneficial to delay filing even longer since we would not be penalized? We are owed around $1k in refund for 2020 which I understand would be delayed by filing late, so just trying to decide if the juice is worth the squeeze here.
(and to head off the horde of angry PMs -- yes, I understand that I'm exploiting a loophole here and that maybe I'm not the #1 intended recipient of this money, but frankly I'm happy to pay any tax I'm legally required to pay and will do so without complaint, but I'm also not going to pass up funds I'm legally entitled to. Would you?)
Thanks.
Submitted March 08, 2021 at 05:40PM by stormandsong https://ift.tt/3cjN4QW
