- 2020 Posts
- 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
The CARES Act Brings Many Changes for Individuals and BusinessesMay 13, 2020
Prepared by Laurie Kaplan, Partner, MichaelSilver
Six-months ago, very few people would have predicted that in 2020 a novel Coronavirus pandemic would upend our everyday lives as we know it. The Internal Revenue Service (IRS) has passed several new policies to help individuals weather this storm. Below are some of the key provisions in the CARES Act that may affect you.
Extension of filing deadline from April 15th to July 15th – All federal tax returns, which would be due during this period, are automatically postponed until July 15th. Any tax payments due with these returns are also postponed until July 15th, including your 2020 first and second quarter estimated tax payments. Many states have followed federal guidance and extended their filing and payment deadlines as well.
Economic Impact Payments – The main push to get money to individuals quickly is through economic impact payments. Eligible individuals are to receive $1,200 ($2,400 for a married couple), plus an additional $500 for each qualifying child under the age of 17 who is a dependent. Phase-out for these payments begins at $75,000 single/$150,000 married filing joint. Social security recipients, who are not required to file a tax return, will automatically have money deposited into their bank accounts. Hopefully, many of you have already received your payment. If not, you can go to the IRS website and check your payment status.
No Required Minimum Distributions (RMD) for 2020 – Due to the roller coaster nature of the stock market this year, the IRS has suspended the RMD requirement for 2020. This will allow time for retirement accounts to recover from the serious declines realized earlier this year. This includes inherited IRA accounts and your own IRAs and retirement plans.
What if you already took your RMD (or a portion of it) this year? If you took the distribution within the last 60 days, you might be eligible to roll it over to a qualified IRA or pension account. This will be allowed if you have not had a rollover within the last 12 months. If your distribution was taken over 60 days earlier or if you take monthly amounts, a rollover is not an option, but you can stop the distributions for the rest of the year.
A word of caution: Many individuals use the withholding from an IRA to cover expected taxes for the year, including income earned from investments and other sources. If you are in this situation, you should discuss this with your tax advisor, as you might need to switch to quarterly estimated taxes for the year.
Special rules for the use of retirement funds (including IRAs) – For individuals who are affected by the coronavirus, a special distribution of up to $100,000 can be taken in 2020. The income from a coronavirus distribution will be recognized over three years. To avoid income recognition, taxpayers have the option to recontribute funds to an eligible retirement plan (or IRA) within three years.
Special Rules for Charitable Contributions for 2020 – An above-the-line deduction will be allowed for cash contributions of up to $300 for taxpayers who will not be itemizing deductions on the 2020 federal tax return.
In addition, there will be no income limit for contributions made in 2020. Without this provision, cash contributions would be limited to 60% of a taxpayer’s Adjusted Gross Income (AGI).
Please call the MichaelSilver tax professionals at 847.982.0333 if you have any questions regarding these special provisions and how they affect your tax situation.