How Divorced Families Can Maximize Their Relief From The New Stimulus Package
The $1.9 trillion American Rescue Plan Act of 2021 (the "American Rescue Plan") is now enacted. The package expands relief provisions first introduced in the Coronavirus Aid, Relief and Economic Security (CARES) Act from March 2020 and introduces new measures to help families and businesses. What does this mean specifically for single parents or families going through divorce? There are 3 major components:
Recovery Rebate Checks (also known as a stimulus check) – for parents and children
Child Tax Credit – for dependent children
Child and Dependent Care Tax Credit – for dependent children where the qualifying parent paid for care to work
There are a lot of nuances to this law. This excellent article includes a summary of the package’s major changes. The most important thing to know is that even if you did not qualify in the past, you may now, so it is highly recommended that you ask your tax preparer about your specific eligibility.