Our other articles in this series:
- 2019 IRS-California Tax Return, Contributions, Filing Deadline Extensions
- All About Economic Stimulus Payments Under the CARES Act
- How the 2019 Coronavirus Relief Bill Helps Businesses (CARES Act)
On March 27, 2020, The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. Here are a few of the key tax-related provisions of the law which may affect you:
- Recovery Rebate credit of up to $1,200 per individual and $500 per child that are phased out for taxpayers with AGI over $75,000 ($150,000 MJF and $112,500 HOH) and plan to be distributed within the next three weeks. These will be direct deposited to individuals using direct deposit banking information on a return any time after January 1, 2018.
- Penalty-free withdrawals of tax retirement funds of up to $100,000. One can avoid taxes on the withdrawal if the money is put back within three years; otherwise income is recognized over a three-year period. It must be a corona-virus-related distribution such as having the virus or experiencing adverse financial consequences, such as inability to find work or childcare.
- They have increased the limit on borrowing from 401(k) accounts from $50,000 to $100,000, with 2020 payments extended for a year.
- A temporary waiver of Required Minimum Distribution (RMD) requirements in 2020.
- For filers taking the standard deduction there is an above-the-line charitable contribution up to $300.
- The suspension of charitable contribution limits for 2020.
These are very uncertain and confusing times. Please let us know how we can assist you or answer your questions. We hope you and your families are staying well.
