CARES ACT for individuals
Please note the CARES Act (the Act) is a significant piece of legislation and we are not attempting to fully cover all changes made by the Act. The items below are those we believe are most important to our clients.
Stimulus Checks - single taxpayers will receive $1,200 and joint filers will receive $2,400. There will also be an additional $500 for each qualifying child. The stimulus check is a 2020 credit that is paid in advance. The amount of the payments will be reduced by $5 for each $100 a person's adjusted gross income (AGI) exceeds the following:
Unemployment - any employee laid off as a result of COVID-19 is eligible to receive state unemployment plus an additional $600 per week in federal unemployment through July 31, 2020. Self-employed workers and independent contractors would qualify under the federal program.
Retirement Distributions -
Charitable Contributions -
- Single - $75,000 with payments eliminated once AGI is over $99,000
- Head of Household - $112,500 with payments eliminated once AGI is over $146,500
- Married Filing Jointly - $150,000 with payments eliminated once AGI is over $198,000
Unemployment - any employee laid off as a result of COVID-19 is eligible to receive state unemployment plus an additional $600 per week in federal unemployment through July 31, 2020. Self-employed workers and independent contractors would qualify under the federal program.
Retirement Distributions -
- Taxpayers that have been diagnosed with COVID-19, who have a family member diagnosed with COVID-19, or who have suffered financially as a result of COVID-19 are eligible to withdraw up to $100,000 from retirement accounts in 2020 without a 10% penalty. The distribution is taxable over a three year period unless the taxpayer elects to pay it back within three years.
- The Required Minimum Distribution (RMD) from retirement accounts has been waived for 2020.
Charitable Contributions -
- For tax year 2020, taxpayers that don't itemize deductions can take up to $300 in charitable contributions made in cash in addition to the standard deduction.
- For taxpayers that itemize in 2020, the charitable contribution limitation, which limits charitable contributions to 60% of adjusted gross income, has been eliminated.
