Tax Relief

Prolonged Little one Tax Credit score gives 1000’s of tax breaks

U.S. Senator Brian Schatz (D-Hawai’i) has published a resource guide to help Hawaiian families learn about the new tax benefits of the American Rescue Plan Act – including the expanded child tax credit.

“The newly expanded child tax credit will put more money in the pockets of hundreds of thousands of Hawaiian families who need a little extra help to get through this difficult time.” said Senator Treasure, a member of the Senate Appropriations Committee. “I encourage every working family to visit our website to see if you qualify for this new tax benefit.”

Eligible families can receive up to $ 3,600 per child under 6 years old and $ 3,000 per child under 17 years of age under the Extended Child Tax Credit. These extended benefits run at $ 150,000 for co-filing married taxpayers, $ 112,500 for head of households, and $ 75,000 for individual filers. Experts believe these changes will reduce child poverty by 45% and benefit more than 300,000 children in Hawaii who are currently not eligible for the full benefit.

The American Rescue Plan Act also improved the earned income tax credit by making the tax credit larger and available to more working adults without children. Additionally, the Exemption Act has expanded the tax credit, which helps offset some of the childcare costs, the child and dependent care credit, by fully providing families who earn less than $ 125,000 and the amount of Credit is increased.

The US $ 1.9 trillion bailout bill is the second largest bailout in American history and was incorporated into law on March 11th.


The full resource guide, with more eligibility details, is below and is available here. It will be continuously updated as the IRS releases more information.



Child tax credit

As part of the US rescue plan, the 2021 child tax credit will be increased in the following ways:

  • The maximum balance will be increased from $ 2,000 to $ 3,000, with an additional $ 600 for each child under the age of six, and the full balance will be extended to 17 year old children.
  • The increased amount is $ 150,000 for co-filing married taxpayers, $ 112,500 for head of households, and $ 75,000 for individual claimants.
  • The CTC is fully refundable for 2021. If the maximum CTC is greater than your tax liability, the IRS will give you the deductible.
  • The IRS will be sending funds out regularly (ideally monthly) from July through December 2021 instead of having families wait until tax season to apply for the credit. Families should receive around half of the CTC benefit by December and claim the rest on their 2021 tax returns.
  • The CTC is being extended to families in Puerto Rico and other US territories.


Earned Income Tax Credit

The American Rescue Plan expands the EITC for taxpayers without qualified children for 2021 in the following ways:

  • Reduces the minimum age for using the EITC without children from 25 to 19 years old (for full-time students who are not foster or homeless youth, the minimum age is 24 years) and removes the upper age limit so that people aged 65 and over are eligible.
  • Increases utility from $ 543 to $ 1,502.
  • Increases the loan amount and the exit percentage from 7.65 to 15.3 percent.
  • Increases the income at which the maximum loan amount is reached to $ 9,820 and the income at which the exit begins to $ 11,610 for non-joint applicants.
  • Removes a legal requirement to allow a taxpayer to claim the childless EITC if they cannot claim the EITC for otherwise qualified children because their children do not have valid social security numbers.
  • Allows married but separated individuals to be treated as non-married for the purposes of the EITC if no joint return is filed. This applies to taxpayers who have lived with a qualified child for more than six months, but either do not live with their spouse or have a separation decree or a separation agreement.
  • Allows taxpayers to use their 2019 income on their 2021 income towards their EITC claims if their 2021 income was less than their 2019 income.

Loan for children and those in need of care

The American rescue plan improves credit for children and those in need of care:

  • The CDCTC will be fully reimbursed for 2021.
  • The credits are also available to families earning less than $ 125,000 (down from $ 15,000) and partial families earning between $ 125,000 and $ 400,000.
  • The balance increases from 35% of $ 3,000 for one child ($ 6,000 for two or more) to 50% of $ 8,000 for one child ($ 16,000 for two or more). At $ 125,000, the loan installment starts to run out and is 20% before tapering off completely for families earning $ 500,000.
  • The exclusion for employer-provided caregiver will increase from $ 5,000 to $ 10,500 in 2021.

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