Coronavirus reliefs for individuals & businesses
Updated: May 16, 2022
Updates on 11/17/2020
Economic Impact Payment: Didn’t receive a payment? Claim the Recovery Rebate Credit when filing a 2020 individual income tax return next year
When you file your 2020 taxes and you were not eligible for an Economic Impact Payment in 2020, you may be eligible for the Recovery Rebate Credit. This Recovery Rebate Credit is figured like the Economic Impact Payment, except the amounts are based on tax year 2020, instead of tax year 2019 or tax year 2018, information.
The eligibility criteria are the same, and the maximum credit is $1,200, or $2,400 if married filing jointly, plus $500 for each qualifying child. This means anyone who received the full Economic Impact Payment amount during 2020 for both themselves and their qualifying children cannot get the credit.
Where do I claim the recovery Rebate Credit?
The credit can be claimed on either Form 1040 or Form 1040-SR. The 2020 instructions for these forms includes a Recovery Rebate Credit worksheet to help determine eligibility and figure the credit.
Visit the IRS Economic Impact Payment Information Center for answers to questions about eligibility, payment amounts, payment timing, and more.
Charitable deductions for non-itemizers and itemizers
Individual taxpayers are permitted to take a new above-the-line deduction for charitable contributions up to $300 of cash contributions made in 2020. this is per tax return and not per taxpayer. Therefore, married filing jointly couple who do not itemize can take only up to $300 (and not $600) on their jointly filed tax return even if they donated more than $300 combined in 2020.
For those who itemize, the 50% AGI limitation is suspended in 2020. Therefore, 2020 charitable contribution up 100% of an individual adjusted gross income can be deducted. Itemizers cannot take an above the line charitable deduction.
Can Whin Global Help?
Your CPA at Whin Global can assist and answer your question related to the stimulus check, charitable deduction and other tax questions. Get in touch, we are her to help.
See our blog on key tax provisions impacting individual and businesses contained in the year-end coronavirus relief legislation, known as the Consolidated Appropriations Act, 2021 (H.R. 133), that was signed into law on Dec. 27, 2020.
THE MOST UP TO DATE INFORMATION REGARDING THE CORONAVIRUS TAX RELIEF AND ECONOMIC IMPACT PAYMENTS IS LOCATED IN THE FOLLOWING IRS OFFICIAL LINK: https://www.irs.gov/coronavirus-tax-relief-and-economic-impact-payments. PLEASE REFER TO THIS IRS WEBSITE LINK FOR THE MOST RECENT UPDATES AND OFFICIAL GUIDANCE.
This below is a summary of a few individual tax relief provisions as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), P.L. 116-136 signed into law on March 27, 2020. The below summary is up to date as of April 1, 2020.
The below is originally published on March 31, 2020:
Tax filing &payments deadlines extended to July 15, 2020
The due dates for filing of Federal income and gift tax returns and for paying income and gift taxes as otherwise due on April 15, 2020, are extended to July 15, 2020, as a result of the Coronavirus pandemic. The extension is automatic and available to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate entities, as well as those who pay self-employment tax. Any interest, penalty, or addition to tax for failure to file or pay tax will not accrue until July 16, 2020, as a result of the extension. Taxpayers do not need to file Form 4868 or Form 7004 or call the IRS to receive the extension. Standalone informational returns filing deadlines are not extended.
Any interest, penalty, or addition to tax for failure to file or pay tax will not accrue until July 16, 2020, as a result of this extension relief
State tax returns
Most U.S. states and local governments have provided some forms of tax relieves due to the Coronavirus pandemic. For example, Ohio has extended the deadline to file and to pay income tax as well as to pay the first and second quarter of 2020 estimated taxes to July 15, 2020. Check with your state tax agencies here for more details.
Recovery Rebate Credit
The CARES Act provides that all U.S. eligible resident individuals may receive the full economic impact payment of $1,200 ($2,400 for married filing jointly). This credit is a refund advance of a 2020 refundable tax credit that is based on an individual 2020 tax return. However, the credit will not be reduced below zero.