Hey, a lot of folks are wondering what the latest is on this $78 billion deal. Is this actually going to delay the government shutdown and what's in it for that $78 billion deal for you? Well, there's a lot. First and foremost, if you have not yet applied for the Employee Retention tax credit, it might be going away Way sooner than expected. So basically, if you think you're eligible and you want some free money, you might want to consider applying probably before January 31st.

Now at the moment, the IRS has stopped processing these, but they're on a tentative pause as they investigate fraud in the Employee Retention tax credit. So point is, I Don't know if even at this point you'll still be able to get in, but you probably nearly definitely won't be able to get in after January 31st if this new $78 billion deal goes through. So let me just quickly catch you up with the Employee Retention tax credit since there are probably many of you who are or business owners here. and if you're not, it's just worth knowing about this before we get to talking about the child tax credit.

In the other updates, If you are a business that had payroll in 2020 and 2021, you're eligible for a tax credit if you meet one of three conditions. Initially, the conditions had to do with you showing a decline in income in any part of 2020 itself or the first 3 quarters of 2021. One, However, they loosen that. Uh, and so now those two conditions expanded to a third condition that is either 2020 or the First three quarters of 2021.

They expanded that to basically say or your business was shut down during 2020 or the first three quarters of 2021 which basically kind of made everybody be like uh yeah yeah, I was subject to the shutdown. so pretty much every person who has payroll has been getting beat up by companies that are basically calling you up going hey, you want to get some free tax credit? Give us 50% of the tax credit. We'll help you get the tax credit and if you get it, you just give us 50% as part of us getting that for you because it's money you didn't even know you were potentially eligible for, right? So there are a lot of companies doing that and it's not that hard to apply for it. I Mean quite frankly, you could probably just Google the IRS form by typing in employee Retention tax credit with the word or letters A, the A and the S and then, well, yeah, no kidding.

Surprise surprise, you can get the whole IRS forms and guides on exactly how to fill out the form and knock this out. But the point is, in 2021, this actually had a pretty big number attached to it. You were able to get up to 70% of employees qualified wages up to $28,000 per employee in 2021. Which is wild because that means if you paid an employee a qualifying employee uh, let's see if you paid them $40,000 a year or more, you could get 28 grand towards their payroll in 2021 per employee.

Okay, that's a lot of potential money Again, go to the Employee Retention Tax Credit form uh at the IRS directly and you could see the eligibility checklists they have. You could see the forms for actually filling this out. All you have to do is Google uh IRS Employee Retention Tax Credit and they have a full breakdown for you here on all the eligibility the details. So take a look at this if you're interested in that.

The point is, the $78 billion deal that we're talking about now will probably kill the employee retention tax credit after January 31st. They're doing that because they think they'll save about 70 billion. And now while they save $78 billion, Congress is going to pull the usual and they're going to spend $78 billion. Yes, that's kind of exactly what they're trying to do.

Uh, the $78 billion deal would enable increasing the child tax credit refundability. So I Want to be really clear about this. The child tax credit for 2021 got boosted from $2,000 to $3,000 up to another $600 if your child was under six, right? Okay, so the credit was 2,000 went to 3,000 to 3600 in 20121 That was 2021. that's gone.

That $2,000 was also a doubling of what the child tax credit used to be which was $1,000 Ivanka Trump Got credit for kind of doubling that child tax credit. The point though, is that now there's talk about increasing the refundability of that tax credit. It's basically a way of saying, look, if you owe $22,000 in taxes and you have one child and you meet the income thresholds, boom, you pay zero in taxes. But what happens if you owe zero in taxes and you're supposed to get that $22,000 tax credit? Well, if it's non-refundable you don't get it.

You lose it. It evaporates. Well, this plan would expand the refundability. Uh, for that child tax credit now I Broke all of these phase outs and the details down because they're a little hard to follow uh out on Ec.com Remember, just go to Ec.com You can see all these details uh, yourself.

and then you can do your further research on this. So anyway, uh, the refundability aspect would grow. The refundability is expected if this bill passes, which it has not passed yet, is expected to grow to $1,823 19, and 24 and 20 2025 with a possible inflation bump of the tax credit itself to $2,100 in 2025. So the refundability portion uh would not only remain at $1600 but also start slowly bumping up.

So it really helps the lowest of income individuals who are not paying that much in taxes. and they'd basically be getting a stimulus check. uh, for money that they're not owing in taxes if they meet the income criteria. Which, the income criteria the phase outs over here roughly less than 75k for the full benefit if you're single, 112.5 head of household, 150 for joint filers, uh and uh, then that phases out or reduces by $50 of a credit for each 1K of come, you're over that, so it's not a hard drop off.

at 75k single, it slowly goes down. Basically, you're down 250 bucks on it if you're at $80,000 of income, so on, and so forth. So anyway, expanding this is coming at the cost of cutting that employee retention tax credit, put some more history on here and then some other tax breaks that are expected to come in expanded tax breaks for Taiwan, basically treating them under uh, some more preferential Uh tax treaties, the expansion of disaster tax relief, lowincome housing tax credits, and potentially expanding the 179 deductions for machinery and equipment, and certain business interest expenses that were limited. Some of these we don't have all of the details yet, but we're looking for retroactive tax benefits that could hit in 20123 uh, that is I know we're in 2024 now, but it could apply to the 2023 tax return.

So what I always like to do is I like to have like one notepad where I put like reminder for 2023 taxes and then I just like to put little notes down. So if I'm a business owner I'm like talk to CPA about employee retention credit Now you want to do that before January 31st. But then you'll also want to look and see how did 179 deductions change some deductions. For example, if you were like insane and you decided to buy a plane in 2022, you could get a 100% of a deduction on it in 23.

that went down to 80% and in 2024 I think that's down at 60% now. I think some of these are going to get bumped back up to 100% so we don't know all of the details yet because this is just sort of like no taking. We don't have the full bill yet uh, from from what's being talked about in the halls of Congress uh, along with potentially better tax benefits for research and uh uh, and development tax credits maybe being able to fully deduct some of the R&D expenditures rather than writing them off or appreciating them essentially over 5 years, so some expanded benefits as well. It's also worth marking your calendar for January 19th that's this, Friday and February 2nd because both of those are the current government shutdown dates, we went for this weird laded approach when Johnson took over uh in uh as the Speaker of the house and uh, right now we've got Chuck, Schumer and Johnson and basically congressmen and women posturing to kick this down the road to no, not actually passing a budget like you would expect Congress to actually do their job, but instead delaying this just to March 1st and March 8th.

So that gives you an update on what's going on with this. Talk about the child tax credit stimulus as well as the employee retention tax credit. If you found this helpful, consider subscribing. Thanks so much for watching and we'll see you in the next one.

Goodbye, Why not advertise these things that you told us here? I Feel like nobody else knows about this? We'll We'll try a little advertising and see how it goes? Congratulations man, you have done so much. People love you people. look up to you Kevin PA Financial analyst and YouTuber meet Kevin Always great to get your take even though I'm a licensed financial adviser, real estate broker, and becoming a stock broker. This video is neither personalized Financial advice nor real estate advice for you.

It is not tax, legal or otherwise personalized advice tailor to you. This video provides generalized perspective information and commentary. Any thirdparty content I show should not be deemed endorsed by me. This video is not and shall never be deemed reasonably sufficient information for the purpose of evaluating a security or investment decision.

Any links or promoted products are either paid affiliations or products or Services which we may benefit from I personally operate and actively managed ETF and hold long positions in various Securities potentially including those mentioned in this video. However, I have no relationship to any issuers other than House Act nor Am I presently acting as a market maker.