Cash payments and tax relief for individuals in new law - Crawford Ellenbogen
A new law signed by President Trump on March 27 provides a Individual cash payments Under the new law, an eligible individual will receive a cash Individuals who have no income, as well as those whose income The AGI thresholds will be based on 2019 tax returns, or 2018 The income thresholds The amount of the payment is reduced by 5% of AGI in excess of: But there is a ceiling that leaves some taxpayers ineligible for Most eligible individuals won’t have to take any action to Other tax provisions There are several other tax-related provisions in the CARES Act. Stay tuned These are only a few of the tax breaks in the CARES Act. We’ll
variety of tax and financial relief measures to help Americans during the
coronavirus (COVID-19) pandemic. This article explains some of the tax relief
for individuals in the Coronavirus Aid, Relief, and Economic Security (CARES)
Act.
payment equal to the sum of: $1,200 ($2,400 for eligible married couples filing
jointly) plus $500 for each qualifying child. Eligibility is based on adjusted
gross income (AGI).
comes entirely from Social Security benefits, are also eligible for the
payment.
returns if you haven’t yet filed your 2019 returns. For those who don’t qualify
on their most recently filed tax returns, there may be another option to
receive some money. An individual who isn’t an eligible individual for 2019 may
be eligible for 2020. The IRS won’t send cash payments to him or her. Instead,
the individual will be able to claim the credit when filing a 2020 return.
a payment. Under the rules, the payment is completely phased-out for a single
filer with AGI exceeding $99,000 and for joint filers with no children with AGI
exceeding $198,000. For a head of household with one child, the payment is
completely phased out when AGI exceeds $146,500.
receive a cash payment from the IRS. The payment may be made into a bank
account if a taxpayer filed electronically and provided bank account
information. Otherwise, the IRS will mail the payment to the last known
address.
For example, a distribution from a qualified retirement plan won’t be subject
to the 10% additional tax if you’re under age 59 ½ — as long as the
distribution is related to COVID-19. And the new law allows charitable
deductions, beginning in 2020, for up $300 even if a taxpayer doesn’t itemize
deductions.
cover additional topics in coming weeks. In the meantime, please contact us if
you have any questions about your situation.