- ECONOMIC IMPACT PAYMENTS
- Did you file 2018- or 2019-income tax returns? If so, you do not need to do anything else to receive your payment.
- $1,200 for an individual. Single taxpayers phase out between $75,000 and $99,000.
- $2,400 for a married couple. Married taxpayers filing jointly phase out between $150,000 and $198,000. Have kiddos? Then add $500 per child under age 17.
- NEW RULES FOR RETIREMENT ACCOUNT DISTRIBUTIONS
- Withdraw up to $100,000 in 2020 from your IRA or 401(k).
- You are eligible if you are diagnosed with, or suffered adverse financial consequences from, COVID-19. No 10% early withdrawal penalty if you are under 59½.
- It is still taxable, but you can spread the income over three years (2020, 2021, 2022). Avoid taxes, however, by repaying it back into the account over three years.
- Required Minimum Distributions are gone this year for IRAs and employer retirement plans (like your 401(k) or equivalent), but not for cash balance and defined benefit plans.
- Did you turn 72 in 2020? Were you over 70½ in 2019? Are you the beneficiary of an inherited IRA? If yes, then this relief applies to you.
- CHARITABLE CONTRIBUTION TAX INCENTIVES
- Taxpayers who do not itemize get a $300 deduction in 2020.
- These new Qualified Charitable Contributions must be made using cash.
- They cannot be made to finance a donor advised fund.
- For 2020, the limit on charitable cash contributions is 100% of Adjusted Gross Income (AGI), up from 60% of AGI. Any excess can be carried forward for up to five years.
- STUDENT LOAN HELP
- Federal student loan payments through Sept. 30, 2020 are suspended.
- No additional interest will accrue during this time period.
- All involuntary debt collections are suspended through Sept. 30, 2020.
- Employers can pay down up to $5,250 of an employee’s student debt through direct payment to the lender. This is only available through Dec. 31, 2020, and it is tax-free to the employee.
- MEDICAL EXPENSES
- HSAs, MSA and FSAs can now be used for over-the-counter medications.
- Medicare beneficiaries will receive the COVID-19 vaccine (when available) at no cost.
- Medicare Part D recipients must be allowed to request a 90-day supply of prescription medicine.
- Telehealth services are covered in 2020 by an HSA before a participant meets their deductible.
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