Make a Difference for Generations to Come

Make a Difference for Generations to Come

Ways You Can Give to Make a Difference

Planned Giving

About Bequests

You may be looking for a way to make a significant gift to help further our mission. A bequest is a gift made through your will or trust. It is one of the most popular and flexible ways that you can support our cause.

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IRA Charitable Rollover

An IRA rollover allows people age 70 1/2 and older to reduce their taxable income by making a gift directly from their IRA.

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Beneficiary Designations

A beneficiary designation gift is a simple and affordable way to make a gift to support our cause. You can designate our organization as a beneficiary of a retirement, investment or bank account or your life insurance policy.

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Charitable Gift Annuities

A charitable gift annuity is a great way you can make a gift to our organization and benefit. You transfer your cash or property to our organization and we promise to make fixed payments to you for life at a rate based on your age.

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Donor Stories

Learn how others have made an impact through their acts of giving to our organization and others. Explore the many benefits of charitable gift planning.

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Gift Options

SeniorServ Volunteer

Find out What to Give and learn about the best assets to make a planned gift. Learn about gifts of cash, securities and property. Learn How to Give and discover gift options that provide tax and income benefits. Discover the best planned gift to meet your goals.

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Saturday June 19, 2021

Washington News

Washington Hotline

Increased Child Care Tax Benefits in 2021

With the reduced number of infections and better news for the COVID–19 pandemic, millions of Americans are returning to work. Many parents are making arrangements for childcare. The American Rescue Plan Act (ARPA) includes several benefits that will help parents as they return to work.

The ARPA benefits include an increased child and dependent care credit, higher limits for a flexible spending account (FSA), expansion of the earned income tax credit (EITC) and greater benefits under Advance Child Tax Credits.

1. Increased Child and Dependent Care Credit — ARPA makes it easier for parents to provide child and dependent care. The tax credit for care of qualified dependents is increased from 35% to 50% for 2021. The 2020 amounts of $3,000 for one child, and $6,000 for two or more children are increased to $8,000 for one child and $16,000 for two or more.

With the 50% credit and higher limits, the 2021 credit for one child is $4,000 and $8,000 for two or more dependents. The IRS cautions that the credit does not apply if the employer pays for care or if care is provided through a flexible spending account.

There is a phaseout of the credit for upper–income taxpayers. The credit is reduced for individuals with incomes over $125,000. The credit is reduced 20% for individuals with incomes from $183,000 to $400,000 and then it is phased out.

For the first time, the child and dependent care credit is fully refundable. Even if the family does not owe federal income tax, they may file a tax return and claim the $4,000 credit for one dependent or $8,000 for two or more dependents.

2. Dependent Care Flexible Spending Account (FSA) — Some employers maintain a flexible spending account for dependent care. In 2020, employees were permitted to set aside $5,000 for care of children. ARPA increases this amount for 2021 to $10,500. An employer must modify the plan to recognize the higher limits.

3. Earned Income Tax Credit (EITC) — The EITC is a refundable tax benefit that assists moderate–income workers and families. A larger credit is now available for workers who are at least 19 years of age, even if they do not have dependents. The maximum EITC increases for workers without dependents from $538 in 2020 to $1,502 in 2021. Full-time students under age 24 do not qualify for the EITC. However, it is available in 2021 to seniors over age 64.

4. Expanded Child Tax Credit — The Child Tax Credit available for dependents under age 18 is substantially increased. The $2,000 per eligible child for 2020 is increased to $3,000 per child for 2021 if the child is age six through seventeen. The credit is increased to $3,600 if the child is age five or under.

The credit is phased out for single persons with modified adjusted gross income over $75,000 or married couples filing jointly with income over $150,000. The credit is also fully refundable.

5. Advance Child Tax Credit Payments — From July through December 2021, the IRS will advance up to half of the child tax credit. Advance payments will be based on your 2020 tax return. If there is no 2020 tax return, the IRS may use the 2019 return.

It is important for anyone who potentially qualifies to file their 2020 tax return electronically to choose direct deposit. If you file electronically and use direct deposit, the IRS will be able to use your tax return and make the child tax credit payments directly to your account during the last half of 2021.

Published May 14, 2021
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