Some middle-class families will have a tax rate of zero this year — or less | WHAT REALLY HAPPENED X-Frame-Options: SAMEORIGIN

Some middle-class families will have a tax rate of zero this year — or less

The American Rescue Plan signed into law by President Joe Biden delivered $1.9 trillion of aid to shore up families, businesses, and cities and local governments amid the ongoing pandemic. But it will also have another impact by lowering the average individual tax rate to almost zero — and even less — for families earning below $75,000 a year.

So estimates the nonpartisan Joint Committee on Taxation (JCT), which recently published its forecast for average individual tax rates in 2021. Because of an expansion of tax credits such as the Child Tax Credit and federal stimulus payments, low-income families will effectively get an influx of money back from the IRS.

Middle-class taxpayers earning $50,000 to $75,000 will have an effective average tax rate of -1.9%, while those earning between $50,000 to $75,000 will face a tax rate of 1.8%, the JCT found.

Tags:

Comments

SHARE THIS ARTICLE WITH YOUR SOCIAL MEDIA