Tax News, Updates, and Links

NOTE: The information and links on tax related items are listed based on date implemented.



*********************************************** 2020 UPDATES *********************************************

04/05/2020 - Coronavirus Stimulus Plan (EIP I):

The U.S. government has passed the Coronavirus Aid, Relief, and Economic Security Act (CARES) to balance the economic impact of COVID-19 on Americans and small businesses. 

HOW MUCH WILL I RECEIVE?  Below you will find information for Individuals, Businesses, and those owning Rental Properties. We are providing you guidance based on what we know now. However, things are changing rapidly in this environment, and the final details may change. 

INDIVIDUALS: Under the CARES Act, Stimulus Checks will be issued in the amount up to $1,200 for individuals, $2,400 for joint taxpayers and up to $500 for each qualifying child. Known as Recovery Rebates, these checks will be based on information from your most recent tax filings, either 2019 or 2018 (if you have not yet filed this season). 

• To qualify for full aid, your adjusted gross income (AGI) would need to be under: 
• $75,000 for individuals,
• $112,500 for head of household, or 
• $150,000 for married filing jointly. 
• If you make more than those limits, the check amount would be reduced by $5 for every $100 that your AGI goes over the limit. Taxpayers with incomes more than $99,000 (individual), $136,500 (head of household) or $198,000 (married filing jointly) wouldn’t be eligible at all. 
• Most people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible. For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed. If the IRS does not have your correct banking account information from your 2018 or 2019 Tax Returns, a check will be issued. 
• The IRS will also be using the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to recipients of benefits reflected in the Form SSA-1099 or Form RRB-1099 who are not required to file a tax return and did not file a return for 2018 or 2019.
• These economic impact payments will be available throughout the rest of 2020.  More information on Economic Impact Payments can be found on the IRS website at https://www.irs.gov/coronavirus/economic-impact-payments. 
• More details can be found on the IRS website at https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know

Penalty waived and substantial relaxation of retirement plan withdrawals: The 10 percent early withdrawal penalty on retirement account distributions for taxpayers facing virus-related challenges will be waived. Withdrawn amounts are taxable over three years. You can avoid tax consequences by repaying the distribution to the retirement plan within three years of receipt. Eligible retirement accounts include individual retirement accounts (IRAs), 401Ks and other qualified trusts, certain deferred compensation plans, and qualified annuities. 

Required minimum distribution rules for certain retirement plans (e.g., 401(k), 403 (a), 403 (b),457(b), IRAs (including inherited) have been waived in calendar year 2020. 

Qualified Plan Loans (not IRAs): Normally these plans allow loans up to $50,000 or 50% of the plan balance. This amount is increased to the lesser of total loan balances of $100,000 or 100% of the plans balance if made within 180 days from March 27, 2020. Additionally, payments on qualified plan loans outstanding on or after March 27, 2020 that were normally due between March 27, 2020 and December 31, 2020 get a one-year delay and the normal five-year prepayment term will not count for 2020. Contact your plan administrator for additional information.

Expanded unemployment insurance (UI): Unemployment insurance provisions now include an additional $600 per week payment to each recipient for up to four months, and extend UI benefits to self-employed workers, independent contractors, and those with limited work history. For additionally information on Unemployment and to apply (all states): https://www.careeronestop.org/LocalHelp/UnemploymentBenefits/find-unemployment-benefits.aspx

BUSINESSES: 

The CARES Act is offering to businesses aiming to retain their employees and manage payroll expenses through the crisis. Small business owners can apply for loans backed by the Small Business Administration (SBA) to help maintain cash flow and retain workers. The CARES Act includes financing options for small businesses owners and independent contractors, including the SBA Economic Injury Disaster Loans (EIDL), Emergency Economic Injury Grant, and the Paycheck Protection Program (PPP). The PPP loans have an 8-week covered period starting on the date of loan origination and eligible costs paid during that time may be used to request forgiveness of that portion of the PPP loan (sec.1106). 

• Small businesses that have been in business since January 31, 2020 may apply for loans, which will remain available through the end of June. All 501(c)(3) nonprofits, 501(c)(19) veterans’ organizations, tribal businesses with fewer than 500 employees, individuals who manage a sole proprietorship, and independent contractors are eligible. Additional information about the various options can be found at the SBA website at: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options
• The SBA has a hotline to help answer questions 1-800-659-2955 it is manned from 7:00AM to 9:00PM 7 days a week. You can also reach out to your local Small Business Development Center (SBDC). Additional information can be found on the SBA website at: https://www.sba.gov/local-assistance  
• Additional information for the EIDL can be found at the SBA website at: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance. 
• The application for the SBA Economic Injury Disaster Loans (EIDL) can be found at: https://covid19relief.sba.gov/#/
• If you wish to begin preparing your Paycheck Protection Program (PPP) application, Additional information specific to the PPP can be found at: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp. 
• You can also download a copy of the PPP borrower application form to see the information that will be requested from you when you apply with your financial institution or approved lender. The SBA has a link on their website to help you find a lender if needed ( https://www.sba.gov/paycheckprotection/find ). 
• For Maryland Specific businesses, additional information/resources can be found on their web site:  https://govstatus.egov.com/md-coronavirus-business

RENTAL PROPERTIES: 

Individual/Businesses with Rental Properties (Residential and Commercial) Only you may be able to apply for the EIDL and the Emergency Economic Injury Grant for Lost Rents Due to the COVID-19 Disaster. You can the SBA hotline (1-800-659-2955) to help answer questions related to your rental properties.