Well, the good news. We MAY get an “ADVANCED TAX REFUND” from the government…but let’s first credit the fellow in our Comment Section for finding this buried in the bowels of this Bill:
I am no lawyer but pulled this from a copy of the bill.
Starts on page 144 of 883. Very difficult to read but sounds like they are treating it as a credit for 2020 taxes but making an advanced payment to taxpayers of record from 2018/2019. I may have this all mixed up. Let me know if I am wrong….but gently. haha
ADVANCE REFUND AMOUNT
.—For purposes of paragraph (1), the advance refund amount
is the amount that would have been allowed as a credit under this section for such taxable year if this
section (other than subsection (e) and this sub-section) had applied to such taxable year
DELIVERY OF PAYMENTS
.—Notwithstanding any other provision of law, the Secretary may certify and disburse refunds payable
under this subsection electronically to any account to which the payee authorized, on or after January 1, 2018, the delivery of a refund of taxes under this title or of a Federal payment…”
Great find – and our Thanks!
Now to the discussion of mechanics.
The government is NOT giving you “free money.” Instead, they are assuming you will owe federal income tax (for the current tax year, 2020) and they will put into effect a “tax credit” of the $1,200 or $2,400 (MFJ) amount that has been kicked around.
Of course, this comes with its own set of problems, not the least of which is how people who have changed accounts and banks will be dealt with.
Now let’s talk about the tax rates for 2020 and see how they compared to 2019:
Let’s take the married filing jointly couple with $100,000. In tax year (TY) 2019 they would pay 22% and the same holds next year. There’s a small impact from “indexing” due to inflation.
So where comes the money, right?
But, come next year at Tax Time (April 15,2021) and you expect to get a tax credit for the provisions in the bill passed last night? You will (again as we’re trying to understand the hidden bill) expect to see money land in the account you used (if filing and receiving an electronic refund) in however long it takes for this to work its way through the paperwork processes in D.C.
Thanks to all who contributed to the research…still not impressed with the public policy wonks on this. One reason to do it this way? Makes it look like what it really is: “Advanced Refund.” Instead of a simper “handout.”
Effectively, it’s a tax break. Sheesh!
Now/…why all the other PORK in this thing? No bill to read means no phone calls. And the Adventures of the Deep State continue.
Advance Refund? Horrible.