Tax News

Stimulus Recovery Rebates - CARES Act

Allows for a $1,200 refundable tax credit ($2,400 on a joint return) plus $500 per qualifying child for Child Tax Credit purposes for tax year 2020. Credit is reduced by 5% for AGI over: $150,000 joint, $112,500 Head of Household, and $75,000 all other statuses.

The credit will be advanced by direct debit or check based on the 2019 tax return (1st), 2018 tax return (2nd), or Forms SSA-1099/RRB-1099. This amount is NOT subject to offset if other taxes are due.

Retirement Distributions - CARES Act

A taxpayer can take a coronavirus related distribution up to $100,000 aggregate, and are not subject to 10% additional tax.

Employee Retention Credit - CARES Act

All eligible employers are allowed a 50% credit of the qualified wages paid against employment taxes in a quarter, reduced by any other credits used, and the excess is refundable.

RMD Requirement - CARES Act

Taxpayers who have a 2020 RMD requirement do not have to take an RMD.

Payroll Tax Payment Delay - CARES Act

For 100% of employer payroll taxes incurred between the date of enactment and before 1/1/2021, 50% are due by 12/31/2021 and 50% are due by 12/31/22. This provision does NOT apply if the Employer gets a loan forgiveness under the Act.

The same deferral rule above applies to 50% of SE tax incurred for 2020 paying with the return. 25% must be paid by 12/31/2021 and 25% must be paid by 12/31/2022.

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