How did the 2021 tax policy changes affect US businesses and individuals?

The year 2021 saw several tax policy changes that impacted businesses and individuals in the United States. One of the most significant changes was the passage of the American Rescue Plan Act, which provided various forms of tax relief and stimulus to help individuals and businesses affected by the COVID-19 pandemic.

One of the biggest changes affecting individuals was the expansion of the Child Tax Credit. Under the new law, eligible families could receive up to $3,600 per child, an increase from the previous maximum of $2,000. The plan also included direct stimulus payments to individuals and families, extended unemployment benefits, and a waiver of federal income tax on up to $10,200 of unemployment benefits received in 2020.

For businesses, the CARES Act that was passed in 2020 was extended, providing further tax relief. One of the most significant changes was the extension of the Employee Retention Credit (ERC), which provides a refundable tax credit for businesses that retained employees during the pandemic. The ERC was expanded to cover more businesses and increased the credit amount.

The tax policy changes in 2021 had a significant impact on both businesses and individuals. While some of the changes were temporary and aimed at providing relief during the pandemic, others are more permanent changes that will have a long-term impact on the economy and taxpayers.