Stimulus Payment – the government will provide each taxpayer a rebate $1,200 for singles, $2,400 for married couples filing jointly, $1,200 Head of Household. Families with children under 17 will also receive an additional $500 per qualifying child.
Retirees receiving social security and those receiving disability payments will be eligible. Individuals without a Social Security Number, non-resident aliens and adults taken as dependents do not qualify for the payment.
Phase out begins at – single $75,000, Married filing Joint $150,000, Head of Household $112,500. The payment is reduced by $5 of every $100 in income above the phase out.
Rebates will be paid based on 2019 adjusted gross income or 2018 adjusted gross income (if the 2019 return has not been filed).
What do I need to do to get a payment?
The payment will be made automatically by direct deposit if that information is on file with the IRS (about 3 weeks). If the information is not on file, the payment will be made by paper check mailed to the address on the last tax return (about 6 weeks).
I owe money to the IRS – will I get a payment?
Yes, if you owe money to the IRS or for student loans you should still receive a stimulus check. If you owe back child support your check will be offset by any payments owed.
Other updates:
Unemployment – those forced to file for unemployment will receive an additional $600 per week in additional to state unemployment. Self- employed individuals and contractors are eligible for these benefits. Unemployment benefits will be extended for 13 weeks past the six month usual payout period.
No penalty – The 10% penalty on early distributions from IRAs, 401K’s and other retirement plans is waived.
Individual Taxpayer Changes
Tax Returns:
Tax returns due April 15th 2020 will be due July 15th 2020. These returns include individual tax returns (Form 1040), corporate tax returns (Form 1120) and estate returns (Form 1041). No additional extension is necessary, the additional time to file is automatic.
Taxes on the tax returns listed above will be due on July 15th 2020 without further penalties and interest being assessed.
Estimated Tax payments:
1st quarter 2020 tax payments, originally due April 15th, 2020 are now due July 15, 2020. 2nd quarter 2020 tax payments, originally due May 15th 2020 are still due on May 15th 2020 ( yes, the second quarter payment is due before the first quarter).
I owe money to the IRS – what should I do?
The IRS has unrolled its “People First” initiative to reduce the burden on taxpayers at this difficult time. Here are the basics:
- All liens and levies initiated by field officers will be suspended from April 1 to July 15, 2020. IRS system created liens and levies will also be suspended for the same period.
- Offer In Compromise payments will be suspended until July 15 2020 although interest will continue to accrue. Offers in process will continue to process and additional documentation can be provided. New offers can be filed.
- Taxpayers with existing installment agreements may suspend their payments until July 15, 2020. Agreements will not be defaulted during this period for lack of payment.
