COVID-19 Individual Tax Information

Last updated: December 28, 2020

For your information, here is our General COVID-19 Update regarding changes to our office hours and availability. See additional information below:

Filing and Payment Deadlines Extended

Federal (and Most States) filing deadlines have been extended to July 15th.  This includes both return balances due and first quarter estimated tax payments originally due April 15, 2020.  Please click here for additional state information.  For clients making estimated tax payments, please note, no guidance has been given for second quarter estimated tax payments normally due June 15, 2020.  The extension only states filing and payments due April 15th.

Economic Impact Payment (aka Stimulus check)

Most people do not need to do anything to receive this payment.  If you filed a 2018 or 2019 tax return and are within the income guidelines, the IRS will send the money automatically. The payments will be direct deposited if bank information is on your federal return.

For seniors who collect Social Security, the IRS already has your direct deposit information and nothing needs to be done to get your stimulus check.

The IRS now has a secure portal for stimulus payment information. 

 https://www.irs.gov/coronavirus/economic-impact-payments

Here you can:

  • Add direct deposit information (if not on file from your 2018 or 2019 tax return)
  • Check on the status of your stimulus payment
  • Confirm whether you are set for direct depot or mailing check (check will be mailed to the address on your last filed return.)  

Four things to know about the stimulus payment:

  1. Stimulus payments will be sent throughout calendar year 2020.
  2. Any stimulus payment you receive is NOT taxable income
  3. If for some reason you don't qualify for a payment based on 2018/2019 taxes, there is another chance to get it.  The stimulus payment is an advance payment on a new credit for 2020 returns.  The credit calculation takes into account whether you received the payment during calendar year 2020.  If the answer is no, and your income has decreased, you could get the credit on when filing your 2020 return next year.
  4. If your income goes up, and your 2020 return shows that you would be eligible for a smaller Stimulus payment than you actually received, you should be able to keep the full amount you received.  Currently there is no provision to pay back any of the excess credit.

If you would like us to calculate your likely stimulus payment, please complete our COVID-19 Stimulus Information Request.

Additional information can be found on the IRS Economic Impact Payment website.

More Unemployment for More People

Please note that this is closed to new applications, as of December 2020.

Unemployment benefit have been expanded and will soon include an additional $600 per week based on a federal grant. The $600 will be paid retroactively to March 29th, so expect a bigger check the first week this payment goes through. Please keep in mind that unemployment benefits are taxable and there is currently no indication that the addtional $600 payment will be treated differently than normal unemployment.  Even if you choose to have taxes taken out, the default 10% withholding rate will likely not be enough to cover taxes on your unemployment income. The 10% option is the only one that Mass DOR currently offers, and is only added on request. If you don't ask for witholding they won't withold any tax. Please contact us if you have questions about withholding or making estimated tax payments.

For the first time ever, self-employed individuals will be elgible for unemployment benefits. Mass DOR has announced they are accepting applications, however, not through the traditional system. Please visit Mass DOR website for details. 

IRA and 401k Changes 

  • For IRA owners over 70 1/2, Required Minimum Distributions (RMD's) are suspended for 2020.  This means that if you are normally required to take a distribution in 2020, you can opt out of taking money this year. If your RMD is set to be distributed automatically, you can contact the financial institution to stop the distribution.  This can allow some time for your retirement fund to recover before taking out funds.  If you choose this, remember to restart RMD's for 2021.
  • If you have already taken your RMD for 2020, there is a 60 day window to replace some or all of the funds.  
  • From December, 2019 tax update, if you turn 70 1/2 on January 1, 2020 or later, RMD's can be deferred until  age 72
  • Expanded 401k  loan availability, up to $100k for 3 years.
  • Early withdrawal penalty does not apply on withdrawals for those under 59 1/2 on amounts up to $100k.  The tax on these distributions can be paid over 3 years.

Please be aware that loans or early withdrawals from retirement accounts will affect your long term savings and can have a negative impact on when you may retire.  Although they are available, please use with caution.

Student Loan Payment Deferrals

Loans administed by the US Dept of Education (US ED), will automatically be placed on administrative forbearance from March 13, 2020 through September 30, 2020.  During this time period, additional interest does not accrue. This includes Direct Loans, FFEL and Federal Perkins loans and is available for both current loans and loans in default. 

For private and other loans not through US ED, we suggest that you contact your lender.  State that you are calling due to the Coronavirus pandemic and that you need help with loan payments and ask what relief programs they are available.  Some lenders may offer either forbearance or lower (even 0%) interest rates.  

Coronavirus Scams

Scams about the Stimulus payments are already popping up.  Please be aware that the IRS will NOT call or email you for direct deposit information.  In most cases, they already have it.  If not, there will be a secure portal later in April to provide the IRS this information.  Seniors are often targeted, so please tell all the seniors in your life to guard their personal information.

Check out the IRS website for more information on scams and phishing schemes.

COVID-19 Stimulus Payment Information Request

For additional questions or concerns specific to your tax situation, please complete our COVID-19 Stimulus Payment Information Request and we will get back to you as soon as we can.

Welcome to TaxSense - Henderson, Grealis & Associates PC, CPA Accounting firm licensed in MA.

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Please call us today at (888) 829-7367. Thanks for visiting!

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