After a difficult year, you’re most likely looking for some relief. The good news is that an agreement was finally reached in the U.S. House and Senate in regards to the COVID-19 Relief bill.
This new, $900 billion relief bill has modified, as well as extended, numerous provisions included in the CARES Act from March 2020. The relief bill designates funds to help support people and businesses, renewing many of the CARES Act programs.
While there are numerous provisions and programs included in December’s COVID-19 Relief bill, one question many people have is in regards to their 2020 income.
Due to the difficulties and challenges that 2020 brought forth, many people found themselves either without a job or working reduced/limited hours. Those who claimed more on their 2019 taxes than they will on their 2020, are left to wonder what to do and how this will affect them.
COVID-19 Relief Bill “Look Back” Provision
In 2020, an overwhelming number of people found themselves out of work or with greatly lowered hours due to business closures and other COVID-related issues. With tax season on the horizon, they are trying to figure out how to approach their new circumstances.
During this time when financial relief is essential for many, the idea of having a lower tax refund is disconcerting. Many found themselves making significantly less in 2020 than in 2019. Typically, under these circumstances, people would qualify for a lower tax credit and thus receive a lower tax refund.
However, thanks to the “Look Back” provision included in the COVID-19 Relief bill, filers who made less in 2020 can actually use their 2019 income for the Earned Income Credit and the Additional Child Tax Credit (optional – if it benefits them more).
Using the 2019 higher income instead of 2020’s lower income, may enable these families to receive a bigger tax refund than they would have. If there was a rebate credit that they were unable to claim for either 2018 or 2019, they will be able to recover these missed payments when filing their 2020 taxes.
The Look Back provision is seen as an enormous help for those who have had to deal with the brunt of financial difficulties during 2020. Instead of facing the possibility of a lower tax return in a time when they need it most, people are given the opportunity to claim a higher income in order to receive the highest refund possible.
Filing 2020 Taxes with ATC Tax Professionals
Taxes are often consuming. Filing 2020 taxes may even seem impossible since new tax laws were introduced. With the added provisions and rules regarding the filing of 2020 taxes, you will need help to wade through the papers and possibilities.
ATC Tax Professionals can help you file your taxes accurately in order to receive every deduction and tax credit you deserve. Using the proper forms, they will be able to help you discover the filing route that is best for you.
Everyone’s financial situation is different, which is why it’s important to talk to a professional. They can help you make the best decisions for your situation.
SEE IF YOU QUALIFY FOR THE “LOOK-BACK” PROVISION
CONTACT ATC TAX PROFESSIONALS 1-855-282-1050