COVID-19 Information for Individuals
Important Note
The summarized information below is tailored for what we think our clients would find most helpful. It is not the full rules, regulations or terms. This summary information is NOT tax advice and may be missing relevant information to make informed decisions. It's meant to help guide you the appropriate details linked below only. Please consult the details in the related links or contact us to discuss your specifics before relying on the summary information. We may update this information as we learn more about the programs.
***updates as of December 2020 COVID relief bill are noted with *** below as well as March American Rescue Plan Act have now been added below.
Individual Stimulus Payments
- Advance credit on your 2020 taxes paid during the year.
- $1,200 per person plus $500 for eligible dependents under 17 years of age
- US resident with Adjusted Gross Income (AGI) up to $75,000 (Single), $112,500 (HoH) or $150,000 (Married). If your income is above these limits, you may receive a pro-rata share until you reach $99,000 (single), $146,500 (head of household) or $198,000 (married)
- No action is required to receive the money.
- It will be sent out in April/May.
- Income is based on your 2019 tax filing, if available, or else 2018 will be used.
- This will be treated as an advanced payment on a 2020 tax credit and there will be a "true up" to actual income in connection with your 2020 filing. Another words, if your income changes substantially when you file your 2020 tax return, you could receive the rebate then (if you did not already receive it during the year), or you may owe it back if you then did not qualify.
- If you used direct deposit on your tax filing, the money will be directly deposited to your account; otherwise a check will be mailed to your last tax filing address.
To confirm your payment or provide the IRS additional information such as banking information, use this link: https://www.irs.gov/coronavirus/economic-impact-payments
More information HERE
***UPDATE DECEMBER 2020***
Under the provisions signed into law December 27, 2020:
There is a second round of stimulus payments beginning late December 2020 for $600 per taxpayer plus $600 per qualifying child. Income limits are the same as above. There is speculation this may be raised to $2000 but this has not passed into law at this time. IRS plans to update the above website with additional information on this second round as available.
***UPDATE MARCH 2021***
Single taxpayers with AGI under $75,000 ($150,000 for married) will receive $1,400 stimulus as an advance against a 2021 tax credit. The credit phases out at $80,000 ($160,000 for joint)
Paid Sick & Family Leave
Employers with less than 500 employees must provide up to 2 weeks paid leave to employees. May be a hardship exemption for businesses with fewer than 50 employees for school closings or childcare unavailability if it could jeopardize business as a going concern. Qualifying reasons:
- Quarantine or isolation order- 100% pay for 2 weeks up to $511 per day
- Health Care Provider advised self-quarantine- 100% pay for 2 weeks up to $511 per day
- Experiencing symptoms and seeking diagnosis- 100% pay for 2 weeks up to $511 per day
- Caring for individual subject to (1) or (2) above- 2/3 pay for 2 weeks up to $200 per day
- Caring for a child whose school or childcare closed- 2/3 pay for 12 weeks up to $200 per day
- Employee information posters required to be posted: click HERE
- Employer Information: click HERE
- FAQs: click HERE
Retirement plan withdrawals
You can take a retirement plan distribution up to $100,000 without penalty. It IS still subject to income tax; however, that tax can be spread over three years. The money can also re-contributed back into the plan to avoid the tax within three years without regard for the annual contribution limits.
Exclusion of employment student loan payments
Employer may contribute up to $5,250 annually toward an employee's student loans without the employee having to pay tax on it.
Charitable Contributions
Will be able to be deducted on your Federal Return in 2020 to 2022 (even if you are not itemizing) up to $300. ***December 2020 update*** The 2021 amount could be up to $600.
Federal Unemployment Supplement
The Federal government may supplement state unemployment payments up to an additional $300-$600 per week as well as include self-employed, independent contractors, etc. for up to four months. In some cases, with this added payment, you may receive more in unemployment than your normal paycheck. Senator Whitehouse noted the break-even salary point was $62,500 for 2020.
***March 2021*** The first $10,200 of unemployment will be non-taxable (retroactively to 2020) for households earnings less than $150,000. The IRS released tax forms, instructions and calculations for this about a week after the law change. They later updated the instructions and calculations. If your return was filed with this income as taxable and you qualify for it to be non-taxable, IRS has stated they automatically make the change and issue refunds.
This income is taxable in MA.
RI tax forms base their income off the federal non-taxable and included no modification even after the after both federal changes. However, on March 25, announced they would update their tax forms to make the unemployment income taxable. If your RI return was filed with this as non-taxable, an updated return is due by the tax filing date.
State Unemployment
Most waiting periods have been waived. Covering more than usual such as independent contractors and self-employed. States encouraging everyone out of work to apply immediately.
Payroll Tax Delay
Employers are allowed to offer to employees a delay in social security tax withholdings. Deferred withholdings are to be ratably withheld and repaid from wages from 1/1/21 to 4/30/21.
***the repayment period is extended to 12/31/2021***
Health Insurance Premium Tax Credit
**March 2021*** If at the end of the year you received too much of an Advanced Premium Tax Credit to lower your health insurance from the state marketplace and owe it back on the tax reconciliation, you do not have to pay back the excess with your 2020 return. Guidance is still pending for those that already filed.
Child Tax Credit
***March 2021***
Child tax credit is increased from $2,000 to $3,000 for children under 18 and $3,600 for children under 6 for your 2021 taxes. This is a fully refundable credit with advanced payments to begin in July 2021. It is phased out at $75,000 for single, $150,000 for join and surviving spouse and $112,500 for HoH.
Tax Filing & Payment Deadlines
2019 TAX YEAR
Individual taxes due April 15th, 2020 have been extended until July 15th, 2020
No additional interest or penalties will accrue on income taxes for balances due between April 15 and July 15
IRA and HSA contributions are not due until July 15th
Quarterly Estimated Tax Payments will be due for tax year 2020 as follows: 7/15, 9/15, 1/15/21
2020 TAX YEAR
Individual taxes due April 15th, 2021 have been extended until May 17th, 2021
No additional interest or penalties will accrue on income taxes for balances due between April 15 and May 15
The first quarterly estimated tax payment is still due on 4/15
STATE PROGRAMS FOR INDIVIDUALS
(RI) Mortgage Relief
Deferral of payments for 90 days without impact on credit reporting from certain RI banks
More info and participating banks HERE
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