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Coronavirus Tax Relief

Here are the highlights of Families First Coronavirus Response Act :

Individuals:

  • Tax Deadline Changed - The deadlines to FILE and PAY federal income taxes are extended to July 15, 2020.
  • Stimulus Checks: The government will provide $1200 in direct payments to taxpayers with incomes up to $75000 per year and families will receive an additional $500 per child (limits are double for married filing join returns). The rebate check for individuals will shrink by $5 for every $100 earned over $75,000. For couples who filed jointly, the reduction will start once they earn more than $150,000; for heads of household, at $112,500. Individuals who earned more than $99,000 and couples who earned more than $198,000 jointly will not receive checks.
  • RMD Suspensions: Congress is considering suspending RMDs for 2020. If enacted, this would apply to both first-time RMDs due April 1 and to other RMDs that aren’t due until December 31. 
  • Early Withdrawal from Retirement Plans–Senate Republicans: wants to waive the 10% penalty for people who are infected by the virus, have family members who catch it or experience adverse financial consequences because of it. The penalty waiver would only apply to withdrawals of $100,000 or less.
  • Expanded unemployment compensation: A bill being considered in the US Senate would provide even greater benefits. It would, for example, provide up to 39 weeks of unemployment compensation for self-employed people, independent contractors, and others out of work because of the coronavirus pandemic who don’t otherwise qualify for benefits. Weekly unemployment checks would also increase by $600 through June, and states would be encouraged to drop one-week waiting periods before benefits can be paid. 
 
Business Owners
 
  • Paid Sick and Family Leave: Workers who are sick or quarantined get full pay while on coronavirus leave, up to $511 per day ($5,110 in total). Workers caring for another person or on leave because of an HHS-specified condition get two-thirds of their normal pay while on leave, up to $200 per day ($2,000 in total). 
  • Tax Credits for the Self-Employed: They receive refundable tax credits against the self-employment tax that are similar to those allowed for employers. 
  • Payroll Tax Cut: President Trump has been pushing for a temporary payroll tax cut for American workers to get more cash into the economy   
  • Disaster Assistance Loan : SBA disaster assistance loans are direct loans with funds provided by the government up to $2 million in support for each affected small business (or to cover 6 months of operational expenses). . The interest rate is 3.75% for small businesses, and for non-profits is 2.75%.  
 

 

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