What Tax Breaks End in 2021?
Parts of the tax code are scheduled to end nearly every year. Some of these provisions are extended, and sometimes they are extended retroactively. Find out which tax code provisions ended Dec. 21, 2021, unless Congress passes legislation to extend them and the president signs the legislation into law.
There are indications that legislation may pass early in 2022 to extend some of these provisions, but it’s always smart to be prepared. And you will be able to use them for your 2021 tax return, which is filed in 2022.
7 Tax breaks that end in 2021
- The expanded Child Tax Credit and the advance Child Tax Credit payments. This valuable credit was only put in place for one year. Without legislative action, the Child Tax Credit will revert to the pre-2021 credit, which has a $2,000 maximum per qualifying child and is not fully refundable. And the advance Child Tax Credit payments will end.
- The expanded and improved Child and Dependent Care Credit. This valuable improvement was also only put in place for one year.
- Recovery Rebate Credit. The Recovery Rebate Credit is how taxpayers “pick up” any missed third stimulus money or thirdEconomic Impact Payments (EIP), which was provided due to the COVID-19 pandemic.
- Charitable Contribution Deductions for non-itemizers. This was in place for 2020 and in 2021 with a slight change.
- Earned Income Tax Credit (EITC) changes for individuals and families not raising children at home. These changes increased the amount of Earned Income Tax Credit that could be claimed, and it also expanded who could be eligible for the credit.
- Mortgage Insurance Premium Deduction. This is for homeowners who itemize. It is frequently subject to retroactive tax changes to extend it one or two more years. This deduction includes Veterans Affairs (VA) funding fees for military veterans who use VA loans to purchase their homes.
- NonBusiness Energy Property Credit. This is another one for homeowners. In some cases, home repairs or improvements that improve energy efficiency can provide a small tax credit. Things like new windows and doors, insulation, and HVAC systems MAY qualify.
Jerry Zeigler is a Navy veteran who serves service members with financial counseling and education. As an Accredited Financial Counselor®, he is a member of the Better Financial Counseling Network and is the owner of JZ Financial Management. As a tax professional and Enrolled Agent, he has a passion for helping taxpayers navigate taxes.