2021-07-13 21:35:35 UTC
An obvious pandering for reelection in which Republicans will look like
Scrooges when they have the power to repeal it but they don't really
From the Web:
Question: Is the IRS up for the challenge?
Answer: It should be, but there are concerns. Many tax experts and some
lawmakers question whether the IRS, with its out-of-date computer
systems, shrunken work force and its myriad of other duties, will be
fully able to deliver periodic child credit payments.
Setting up a new program to deliver regular payments to taxpayers who
must meet complex eligibility requirements to qualify for the child
credit is a challenge for an agency that is not used to sending out
periodic payments. The IRS says that to facilitate advanced payments of
the credit, it is having to build a system to compute and recompute
payments as taxpayers provide new information. Such a system must also
be able to issue and track payments, as well as reconcile all payments
sent out to each taxpayer during the year with the taxpayer's credit
taken on the tax return. The agency also needs to develop a program to
flag returns that don't accurately include all advance payments received
during the year.
Another issue that the IRS will have to deal with is how to minimize the
potential for fraud when it comes to refundable child tax credits. For
example, the IRS estimates that in 2020 it improperly paid $4.5 billion
in such refundable credits.
Nevertheless, despite all these challenges, IRS Commissioner Charles
Rettig says that the tax agency can handle the job. And, so far, the IRS
appears to be on track to start delivering the payments.
Question: Will the higher child tax credit and advance payments
eventually be made permanent?
Answer: Yes, if Democratic lawmakers get their way. Remember that the
child tax credit expansions apply only for 2021. Congressional Democrats
would like to see the enhancements made permanent, touting the impact
that a higher and fully refundable child tax credit would have on
reducing child poverty in the United States. For example, Congressman
Richard Neal (D-MA), the Democratic Chairman of the House Ways & Means
Committee, said the 2021 child tax credit enhancements are unlikely to
go away, and he has unveiled proposed legislation to permanently extend
those expansions. President Biden has also jumped on the child tax
credit extension bandwagon. His proposed American Families Plan would
extend the expanded credit through 2025, though he would make full
refundability, and we assume advance payments, permanent.
If the 2021 child tax credit expansions are not made permanent, or at
least temporarily extended past 2021, then the rules that applied for
2020 returns will kick back in beginning in 2022.