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TAX UPDATES AMID COVID-19 PANDEMIC

Filing Deadline.

On March 20, the Secretary of Treasury announced that the income tax filing date has been pushed back from April 15 to July 15. All filers now have an extra 90 days to file their federal individual income tax returns without being subject to late filing penalties. However, taxpayers getting a refund are encouraged to file their taxes now to get their money.

The extension of the income tax filing deadline also applies to tax payments. Taxpayers that owe money can defer federal tax payments, interest free and penalty free until July 15. Individuals and self-employed taxpayers can defer up to $1 million for tax year 2019 federal tax payments and 2020 estimated tax payments. You can read the official IRS notice here.

The Coronavirus Stimulus Package.

President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) – a bipartisan $2 trillion economic relief plan that offers assistance to tens of millions of American households affected by the COVID-19 pandemic.

The CARES Act offers stimulus checks up to $1,200 for individuals, $2,400 for joint taxpayers, plus $500 for qualifying children. If you have an adjusted gross income of up to $75,000 ($150,000 married filing jointly), you should be eligible for the full amount of the recovery rebate. As your adjusted gross income increases, the stimulus amount you get will go down. The stimulus check rebate completely phases out at $99,000 for single taxpayers, $146,500 for those filing as Head of Household and $198,000 for joint filers with no kids. The stimulus check will be paid this year based on information from your most recent tax return and will be reconciled in tax year 2020 to ensure you received the correct rebate amount.

The CARES Act also offers the suspension of student loans, an increase in unemployment insurance of $600 a week, $500 billion in loans and investments to businesses, penalty waiver for early retirement withdrawals, $130 billion for hospitals, strengthened food assistance measures, protections against foreclosures and evictions, and more.

Learn more about the Act here.

Families First Coronavirus Response Act.

On March 18, President Trump signed into law legislation to provide additional relief for individuals impacted by the coronavirus (COVID-19). The COVID-19 legislation, called the Families First Coronavirus Response Act or H.R. 6201, includes relief for individual taxpayers, self-employed and businesses. The act responds to the growing health and economic crises with provisions for paid sick leave, free testing and expanded unemployment benefits. For more information, please click here.

If you have any questions, please feel free to contact us.

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