CARES ACT - INDIVIDUALS
The IRS is issuing a tax rebate of $1,200 ($2,400 married filing joint) and an additional $500 per qualifying child. A qualifying child is a dependent age 17 or younger (anyone over the age of 17 who can be claimed as a dependent, regardless if they are claimed as a dependent or not, does not qualify for any rebate). This rebate will be phased out by $5 for every $100 of income over $75,000 single, $112,500 head of household, or $150,000 married filing joint. The IRS will be direct depositing your rebate (or mailing a check if you don’t use direct deposit on your tax return) based on your 2019 tax return if you have filed it, otherwise based on your 2018 tax return. This is ultimately a credit on your 2020 tax return, so if you don’t qualify based on your 2018/2019 return you may still qualify when your 2020 tax return is filed. Additionally, if you do qualify on your 2018/2019 tax return and do not qualify when you file your 2020 tax return, the rebate will NOT have to be paid back.
If you have not used direct deposit in the past and would like to get your rebate direct deposited, the Treasury Department plans to develop a web-based portal for you to enter your banking information. If you typically are not required to file a tax return, the IRS is using other information to get you a rebate. This applies to senior citizens, Social Security recipients, and railroad retirees (individuals receiving Form SSA-1099 or Form RRB-1099).
Other changes for 2020:
If you are impacted by COVID-19 and need to withdraw money from your retirement account, there is no penalty for an early withdrawal up to $100,000. The penalty is only waived if you are directly affected by COVID-19. There is also an option to refund your retirement account over the next three years and not pay tax on your withdrawal.
Required Minimum Distributions from your retirement account have been waived for 2020. If you do not need the required minimum distribution from your retirement accounts and would like to leave the money invested to ride out this economic decline, you have the option to do so.