- 2021 Posts
- COVID-19 Vaccine Information
- Medicare and COVID-19
- Ways Caregivers Can Strengthen Connections & Reduce Loneliness
- Easing Your Way Back to Normal
- A Change in Seasons Can Bring a Change in Moods
- New Act Provides Relief for Pandemic Weary Individuals
- Something to Think About
- Do I Hear an Echo? Smart Home Devices Can Make Life Safer and Easier
- "Senior Financial Abuse" as featured in Caregiving Magazine
- Annual Report - FY20
- "Everyone Has a Story to Tell. Are You Ready to Share Your Life Story?"
- "The U-Shaped Happiness Curve"
- 2021 New Year Message from Executive Director
+ 2020 Posts
- "Maximize Your Personal Connections and Minimize the Holiday Blues"
- "Resilience & Aging"
- Self-Care Tips for the Family Caregiver
- Sharing Gratitude During Thanksgiving from Our Executive Director
- NSSC Awarded Chicago Top Workplace
- 'Exercise’ Your Commitment to Stay Fit During Pandemic
- How the End of Daylight Saving Time Affects People with Dementia
- Lifelong Learning Virtual Experience: The Next Best Thing to Being at the Center
- Join us for Gala 2020: Unmasked
- Permission Granted: Time to Host the Perfectly Imperfect Wedding
- North Shore Senior Center Featured in Caregiving Magazine!
- What Does 'Medicare for All' Mean?
- Opening Day Slated for July 6!
- North Shore Senior Center Keeps Older Adults And Their Families Connected
- June 15 Update on Center Reopening
- An Open Letter from the Executive Director
- Initial Plans to Re-Open Center
- HSS & Sewa International Donate Masks to NSSC
- May 14 Update from the Executive Director
- The CARES Act Brings Many Changes for Individuals and Businesses
- May 7 Update from the Executive Director
- April 30 Message from the Executive Director
- Celebrating our Volunteers and Senior & Family Services: A Message from the Executive Director
- Celebrating Our Successes: A Message from the Executive Director
- Message from the Executive Director on HOW Programs
- Winnetka Talk: North Shore senior centers turn to technology to connect and entertain
- Message from the Executive Director
- An Update from our Executive Director & Free Online Classes
- A Note to the North Shore Senior Center Community
New Act Provides Relief for Pandemic Weary IndividualsJanuary 31, 2021
by Laurie Kaplan, Partner, MichaelSilver
On December 27, 2020, President Trump signed the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (Act). While the Act was designed to provide emergency relief to ailing businesses, it also presented new tax legislation that impacted individuals. As part of the Act, individuals who received an economic impact (stimulus) payment last year, may be eligible to receive a second stimulus payment of up to $600 per eligible family member. We will discuss a few of the most significant provisions that will affect taxpayers 2020 tax filings.
Additional Economic Impact Payments (EIP)
The Act provides a refundable tax credit in the amount of $600 per taxpayer ($1,200 for married filing jointly (MFJ)), plus an additional $600 per qualifying child. The phaseouts are lower this time around—just because you received an EIP last time does not mean you will receive one this time. Phaseouts start at $75,000 of modified adjusted gross income ($150,000 for MFJ) and payments are reduced at a rate of $5 per $100 of additional income. Second stimulus payments have been issued already and will be automatically sent to qualified taxpayers who received the initial EIP.
What if you were entitled to an EIP but did not receive one? Not to worry, you will be able to claim the missed payment when you file your 2020 tax return.
Increased Charitable Deductions Allowed
Feeling charitably inclined? Taxpayers can deduct up to 100% of their adjusted gross income (AGI) on cash donations made to qualifying charities instead of the normal 50% limit. This provision is in effect for both 2020 and 2021. Private foundations and donor advised funds are excluded from this provision. However, they are still a valuable tax savings strategy particularly if the donations are made with appreciated stock.
Normally, taxpayers who claim the standard deduction because they do not have enough deductions to itemize on the tax return are not able to benefit from charitable contributions. However, there are special provisions in effect which allow an above-the-line deduction for non-itemizers of $300 for 2020 and $300 Single ($600 MFJ) for 2021.
Additional Flexibility Provided for Distributions from IRA Accounts
Prior legislation eliminated the requirement for required minimum distributions (RMDs) for 2020. However, while not required, some taxpayers took distributions to replace lost or decreased income due to the pandemic. You could take up to $10,000 in distributions from your IRA in 2020 and include it in income over three years as long as it qualified as a coronavirus-related distribution. You also have the option to repay it over three years and avoid paying income tax at all.
What is a coronavirus-related distribution? This includes a taxpayer who was diagnosed or had an immediate family member diagnosed with COVID-19 during 2020. Further, it includes a taxpayer or family member who experienced adverse financial consequences due to quarantine, furlough, reduction in hours worked, reduced hours of operation for a business owner, loss of a job and similar circumstances.
You can now make deductible IRA contributions if you are still working. Previously you had to stop making these contributions once you turned 70½.
The threshold for deductible medical expenses remains at 7.5% of AGI. This was set to increase to 10% for 2021, but the Act permanently lowered the threshold to 7.5%.