Page 21 - Supplement to Income Tax TY2021

Updates, Additions, and Corrections to the Text of Your Income Tax 2021

Premium tax credit (page 525). In the last paragraph of there is any excess, that is the amount you may claim
page 525, the third sentence should state that the “net as a fully refundable credit on line 30 of form 1040
premium tax credit” is reported on Line 8 of Schedule or 1040-SR.
3 (Form 1040 or 1040-SR). Credits for qualified fuel-cell vehicles and two-

Health coverage tax credit (page 528). The Taxpayer wheel plug-in electric vehicles (page 530). These
Certainty and Disaster Tax Relief Act of 2020 extends credits were extended through 2021 by the Taxpayer
the health coverage credit one year through 2021. See Certainty and Disaster Tax Relief Act of 2020.
page 4 of this Supplement. Lifetime learning credit (page 619). After 2020,

Home energy credit (page 529). Subject to the the MAGI phaseout range for the lifetime learning
$500 “lifetime” limit and other limits, the credit credit is the same as for the American opportunity
for insulation, storm windows and other qualifying credit. See page 14 of this Supplement for the 2021
energy-efficient home improvements was extended MAGI limits.
through 2021 by the Taxpayer Certainty and Disaster Medicare Part B and D premiums for 2021 (page
Tax Relief Act of 2020. See page 4 of this Supplement.
641). See pages 6-8 of this Supplement for the 2021
Recovery rebate credit (pages 333, 531). If you did Medicare Part B premiums and the Part B and Part D
not receive the full amount of either the first or second premium surcharges, which generally are based on your
economic impact payment, you may be entitled to MAGI for 2019.
the recovery rebate credit on your 2020 return. Keep Deferral Worksheet for Schedule H or Schedule SE
in mind that the two rounds of economic impact filers (pages 673, 778). Self-employed taxpayers
payments were actually an “advance” of the credit,
but whereas the payments were based on your 2018 filing Schedule SE can defer the payment of the
or 2019 tax year information, the recovery rebate employer share of Social Security taxes allocable to net
credit is based on the information provided on your earnings from March 27, 2020, through December
2020 return. 31, 2020. Similarly, household employers filing
Use the Recovery Rebate Credit Worksheet (see Schedule H can defer the employer share of Social
page 45 of this Supplement) to determine how Security taxes on wages paid from March 27, 2020,
much, if any, you can claim as the recovery rebate through the end of 2020. The maximum deferrable
credit. Assuming you meet the basic credit eligibility amount is figured on Schedule SE (in Part III) or
requirements (you are a citizen or resident alien, Schedule H (on Line 8d), but the actual amount
have a valid Social Security number, are not a that can be deferred is figured on a worksheet in the
dependent), and you did not receive the maximum instructions to line 12e of Schedule 3 (Form 1040
first and second round payments (called EIP1 and or 1040-SR). The Deferral Worksheet for Schedule
EIP2 on the Worksheet), you figure how much of H or Schedule SE filers is shown on page 51 of
each payment you would be entitled to receive as a this Supplement. The deferrable amount from the
credit based on your 2020 return family status. Then worksheet is entered on line 12e of Schedule 3 and
the phaseout is applied. The credit allocable to EIP1 then claimed on Line 31 of Form 1040 or 1040-
and the credit allocable to EIP2 are each phased SR as a refundable credit. The Deferral Worksheet
out by 5% of any excess of your 2020 AGI over the shows how much of the deferred tax is payable by
following thresholds: $150,000 if married filing December 31, 2021, and how much is payable by
jointly or qualifying widow/widower, $112,500 if December 31, 2022.
head of household, or $75,000 if single or married Deduction for commercial buildings (page 697). The
filing separately. The credits, reduced by any deduction for energy-efficient buildings was made
phaseout, are further reduced by the actual amount, permanent by the Taxpayer Certainty and Disaster Tax
if any, of the EIP1 and EIP2 that you received. If Relief Act.

Supplement to J.K. Lasser’s Your Income Tax 2021 | 19