Changes Congress Made to Help You During COVID-19

In response to this world wide pandemic, Congress has issued quite a few measures, including the passage of the CARES Act, to help the economy deal with the COVID-19 outbreak. Here are a few things that may directly affect you.

{AUDIO} Changes Congress Made to Help You During COVID-19

Financial Support for Families

Recovery rebates include $1,200 advance credit per person and $500 per qualifying child. Qualifying taxpayers are under $75,000 in adjusted gross income ($150,000 married filing jointly, $112,500 for head of household) which are based on 2019 reported income. Additional payments are available for households with children: $500 per child up to two children.  Payments are considered refundable tax credits, and therefore, do not count as taxable income.

Early Withdrawal Penalty-Free 

COVID-19 related distributions of up to $100,000 from a retirement account will not be subject to penalty (available to taxpayers who are diagnosed, have a spouse diagnosed, or suffer financial consequences as a result of the COVID-19 pandemic). These distributions may be repaid within three years of the distribution, or the income is spread over three years if it's not repaid. Although this allows flexibility for those in dire circumstances, withdrawing from retirement accounts should only be a last resort.

No RMDs For 2020

Required Minimum Distributions are NOT required in 2020. Considering the calculation for RMDs is based on prior year-end value and the recent market volatility, you may want to consider suspending your RMDs for the remainder of the year.

Tax & Contribution Deadlines Changed

The deadline for filing your 2019 tax return has been extended from April 15th, 2020 to July 15, 2020. This also includes extending the deadline for IRA, Roth, SEP, etc. contributions for the 2019 tax year to July 15, 2020.