June 2021 Tax Updates
June 29th, 2021
On June 17, 2021, a decision was rendered by the Supreme Court in CALIFORNIA, ET AL. v. TEXAS, ET AL. The challenge to the constitutionality of the Affordable Care Act was denied, leaving the law intact.
Advance Payment of Child Tax Credit
Starting in July, the IRS will begin issuing advance payments of the temporarily expanded 2021 child tax credit. Income and age restrictions apply. The IRS has opened a portal for taxpayers to use to determine eligibility.
Required Minimum Distributions
The CARES Act offered a temporary reprieve in 2020 for taxpayers who would have otherwise been obligated to take a required minimum distribution from a retirement account. In 2021, RMDs must resume as this withdrawal suspension was not extended.
Partnership Form – Schedule K-2/K-3
The IRS has published drafts of new reporting forms for pass-through entities. Schedules K-2 and K-3 are designed to create greater transparency to partners and shareholders with foreign activity concerning the calculation of their income tax liabilities. These forms are scheduled to be used for the 2021 tax year.
US Tax Reform Update
Tax reform continues to be a frequently discussed issue in Washington, D.C. under the Biden administration. On May 28, Treasury released the Green Book, which provides a detailed review of the tax reform proposals that have been discussed under the current Administration (The American Jobs Plan and the American Families Plan). This has been seen as a document that will be used as a starting point for discussions with Congress. This reform covers corporate/Federal tax, international tax, and individuals / flow-through entities. In general, most of the proposals would take effect for taxable years beginning after December 31, 2021; however, there are a few exceptions that will look enforce law changes retroactively (e.g., either the day in which changes were announced, the day reform is passed).
Please reach out to a member of the Siegfried team on any questions as it relates to the above.