What is Biden's Tax Plan about?
To get the nation back on its feet, President Biden proposed raising the top income tax rate for wealthy households — those earning more than $400,000 annually — from 37% to 39.6%. As part of the Build Back Better Program, this change is designed to fund major national initiatives by redistributing wealth more equitably.
The new tax law focuses on raising taxes on the wealthy and corporations. The additional revenue collected funds programs such as:
- American Rescue Plan — increases the Child Tax Credit and the Earned Income Tax Credit (EITC);
- American Jobs Plan — a $2.3 trillion infrastructure improvement plan;
- American Families Plan — focuses on helping minorities access education.
Many of the changes outlined here are subject to congressional approval. The tax plan may still be amended or partially eliminated before final passage.
How to use this calculator
This calculator helps you estimate your federal income tax liability under Biden's Tax Plan versus the current tax law.
1. Select your currency
Choose your preferred currency. The calculator supports USD (primary), RUB — Russian Ruble (second priority), and 14 other major world currencies. Tax brackets are defined in US dollars (2021 rates); other currencies are converted at approximate exchange rates for comparison.
2. Choose your income period
- Annual — typical for the American system (enter yearly gross income).
- Monthly — common in international/metric contexts (enter monthly gross; the calculator multiplies by 12).
3. Enter your adjusted gross income (AGI)
Your AGI is your total gross income after specific deductions such as 401(k) contributions. You can find it on your tax form. Our calculator also shows results for your entered income directly.
To be eligible for the Child Tax Credit (CTC), your annual income must be:
- Less than $200,000 for single filers / heads of household
- Less than $400,000 for married couples filing jointly
4. Check your filing status
Your filing status significantly impacts your tax amount. Choose from:
- Single
- Married Filing Jointly
- Head of Household
5. Enter your age
Age determines eligibility for the expanded Earned Income Tax Credit (EITC) under Biden's plan. Workers under 25 or over 65 without qualifying children are now eligible — a significant expansion from the previous law.
6. Check if you have filed your tax return
You can only receive tax credits if you have filed your tax return. Check this box to see credits applied to your results.
7. Enter your dependents
- Children under 6 — eligible for $3,600 Child Tax Credit each (Biden's plan)
- Children ages 6–17 — eligible for $3,000 Child Tax Credit each (Biden's plan)
- Other dependents — eligible for the Child and Dependent Care Tax Credit (CDCTC): $8,000 per dependent, maximum $16,000
Additional benefits and impacts of Biden's Tax Plan
Besides income tax rate changes, Biden's plan includes targeted benefits for families and individuals:
Child Tax Credit (CTC)
- Increased from $2,000 to $3,600 for children under age 6
- Increased from $2,000 to $3,000 for children ages 6 through 17
- Phases out at $200,000 (single) or $400,000 (married) — $50 reduction per $1,000 above threshold
Child and Dependent Care Credit (CDCTC)
- Increased from $3,000 to $8,000 for one dependent
- Maximum increased from $6,000 to $16,000 for two or more dependents
Earned Income Tax Credit (EITC)
- Expanded to include workers under age 25 and over age 65
- Maximum benefit for childless workers tripled from $534 to $1,502
- Workers with qualifying dependents remain eligible at existing income thresholds
Capital Gains Tax
- Investors with incomes over $1 million would pay a 43.4% capital gains tax (up from 23.8%)
Real Estate Changes
- The step-up in basis rule for inherited property will be repealed (family-owned farms are exempt)
- Like-kind exchange deferral eliminated for investors with more than $500,000 in capital gains
Corporate Tax Changes
- Minimum corporate tax rate of 15%
- Carried interest loopholes for private equity and hedge funds will be closed
Changelog
June 2021
Based on bipartisan negotiations, Biden dropped the plan to hike the corporate tax rate from 21% to 28%. Instead, the President proposed setting a minimum corporate tax rate of 15%.
May 2021
Biden proposed raising the top individual income tax rate from 37% to 39.6% for households earning over $400,000 per year as part of the American Families Plan announcement (May 28, 2021).
FAQs
What is the adjusted gross income (AGI)?
The adjusted gross income is the income on which you will be taxed. It is defined as your total gross income minus specific deductions, such as your 401(k) contributions. The AGI is typically found on your IRS Form 1040.
What is the Child Tax Credit?
The Child Tax Credit is a tax break for families with children under 17 (under Biden's plan, expanded to under 18). Unlike a tax deduction — which reduces the amount of income subject to tax — the Child Tax Credit directly reduces your tax liability dollar for dollar.
What is the Earned Income Tax Credit (EITC)?
The EITC is a refundable tax credit for working individuals and families with low to moderate incomes. Under Biden's expanded plan, it now includes workers under age 25 and over age 65, and the maximum credit for workers without children has tripled to $1,502.
Does this calculator support currencies other than USD?
Yes. The calculator supports 16 world currencies including US Dollar (USD) and Russian Ruble (RUB) as the primary options, plus EUR, GBP, JPY, CAD, AUD, CHF, CNY, INR, BRL, MXN, KRW, SEK, NOK, and PLN. Tax brackets remain based on 2021 US dollar amounts; other currencies are converted at approximate fixed exchange rates for illustrative comparison.
What's the difference between annual and monthly income input?
The Annual mode is standard for the American system — you enter your yearly gross income. The Monthly mode is common in international/metric contexts — you enter your monthly gross income and the calculator multiplies by 12 to obtain the annual amount for bracket calculations.