Relief for Individuals
Financial Aid Payments (Stimulus Checks)
The US Treasury will be issuing checks to many Americans to provide financial relief during the Covid-19 pandemic. Individuals earning $75,000 per year or less will receive a $1,200 check tentatively by April 6th. The amount of the check is phased out for those earning over $75,000 to a maximum of $99,000. Married couples will receive $1,200 each if their combined income does not exceed $150,000. Those amounts are phased out for married couples earning over $150,000 to a maximum of $198,000. These income limitations will be based upon the 2019 tax return, if available. If the 2019 tax return is unavailable, the 2018 return will be used. Taxpayers will also receive $500 per qualifying child (age 16 and under). Considering the recent 3 month filing extension, taxpayers should plan accordingly if they have yet to file their 2019 return.
The individual filing deadline of April 15th has been extended to July 15th. Fortunately, this extension of time to file also includes an extension of time to pay. We do advise against waiting unnecessarily, especially if you are expecting a refund.
The US Department of Housing and Urban Development has enacted a 60-day moratorium on all evictions and foreclosures if the mortgage is insured through the FHA. Additionally, you may be able to defer your mortgage payments for up to 6 months. The best course of action is to reach out to whoever services your mortgage and ask what forms of relief are available to you. If you are a renter, reach out to your landlord.
Interest on student loans has been deferred for an entire year and will not accrue during this period. Reach out to the organization servicing your student debt if you need to cease payments altogether. However, if you are able to continue making payments on your student loans, you could eliminate significant amounts of debt in a relatively short period of time and thus reduce future interest expenses.
The CARES Acto creates a new Coronavirus relate distribution option for qualified plans. Participants may take up to a $100,000 Coronavirus related distribution between January 1, 2020 and December 31, 200, to a "qualified invidual" that has been adversly impacted by the virus. These distributions are exempt from the 10% early withdrawal penalty and can be elected to be taxed over a three year period beginning in 2020. Additionally, the CARES Act changes the maximum amount of plan loans (if eligible within your plan) from $50,000 to $100,000 and provides payment relief on outstanding plan loans.
Individuals will be allowed to claim an above the line deduction of up to $300 for charitable contributions for the 2020 year (excluding carryforwards). Further, individuals may be able to claim unlimited charitable contributions in 2020 (normally limited to 50% of AGI).
Lastly, contact your bank or credit union to determine if they are offering any assistance in the form of abated fees or deferred loan payments. We’ve included a link below which summarizes larger banks and the steps they’ve taken to assist their customers in making it through this time of uncertainty.