WHAT IS THE 2021 CHILD TAX CREDIT?
Parents across the country should have received their first couple of payments from the child tax credit enacted by congress in early March. Congress voted in March, 2021 to give parents up to $3,600 to help offset the cost of raising their children. If you are curious about how much you’ll get or if you want to change where the money is sent, you’ll need to visit this website.
THE 2021 CHILD TAX CREDIT IS PROTECTED IN BANKRUPTCY
Kids are expensive, I know…I have two. The extra money helps us all out and gives us a lifeline during these difficult financial times. I know that my clients need this extra money to make ends meet. Fortunately, filing bankruptcy allows you to KEEP YOUR MONEY. 11 U.S.C. Section 541(b)(11) exempts this money from the bankruptcy estate because it was created expressly for the COVID relief package.
HOW DO TAX CREDITS AND TAX REFUNDS NORMALLY WORK IN BANKRUPTCY
While this credit as well as stimulus funds are protected in bankruptcy, you should talk to your attorney to see what other parts of your tax refunds are protected in bankruptcy. In a Chapter 13, you can usually keep around $1,500 of your tax refund without question, sometimes more if extenuating circumstances arise. In a Chapter 7, if you are owed a large refund at the time of filing the trustee can seek to recover those funds if they are outside the exemption, but going forward the trustee will have no further claim to your tax refunds. Obviously it’s our job to strategize with you so you can keep more of your hard earned money.
If you have questions about bankruptcy or want to explore the protections bankruptcy provides, we’re just a phone call or message away.