Covid-19 Tax Updates For Individuals


Beware of Scammers!!

Stimulus payments will be going out soon and the IRS is urging taxpayers to take extra care during this time of uncertainty and be mindful of potential scam calls and email phishing schemes. The IRS isn’t going to call or email asking you to verify or provide your financial information. Do NOT click on any links in an email that looks like it is from the IRS and definitely do NOT click on any attachments.

Seniors are the most vulnerable to these scams, so please educate your loved ones to be extra vigilant about protecting their personal and financial information.

To learn more, visit https://bit.ly/2XEr5Oy and check the IRS website regularly for updates.

Extended Filing and Payment Deadlines

All individual tax return and payment deadlines, including Federal, PA, NJ, NY, and PA local authorities, among others, have been extended. Estimated payments due on April 15, 2020 are also included in this tax relief initiative.

All tax returns and payments due April 15, 2020 have been extended to July 15, 2020. If you typically make an estimated payment on April 15, you won’t need to make that payment until July 15. 2nd quarter estimated due date was extended until July 15. Be sure to include the proper stub with your estimated payment or note on your check or electronic payment which quarter’s estimate you are making.

The City of Philadelphia is asking taxpayers to file and pay their taxes by April 15, 2020; however, they have indicated that they will honor the federal extensions of the deadline to file and pay until July 15, 2020 for Business Income and Receipts Tax and the Net Profits Tax. More information can be found here.

For more information on tax deadlines and extensions visit these links:

IRS

PA Department of Revenue

NJ Division of Taxation

For information on local tax deadlines and extensions, please check the website of your local tax authority.

2020 RMD Waiver

Retirees will get a benefit from the coronavirus stimulus package, also known as the CARES act, in the form of a waiver from taking their required minimum distribution from retirement accounts for 2020.  The waiver applies to anyone with an RMD due in 2020.

This not only allows for the deferral of income tax, but also provides help for retirees who would be forced to withdraw from their retirement accounts while the stock market is in a downturn. The RMD waiver also provides a planning opportunity for those who may choose to take a retirement distribution in order to get the benefit of a low income tax bracket.

Low market values may also make this a prime opportunity to convert your traditional IRAs into Roth IRAs.  This is an excellent opportunity for tax planning.  Contact your tax advisor at Diamond & Associates, PC CPAs for more information.

Economic Stimulus Checks

To help ease the financial burdens associated with the COVID-19 pandemic on citizens across the U.S., the Treasury Department and the IRS will begin to distribute payments in the next few weeks to eligible recipients across the country. Stimulus checks will be distributed automatically, and for most people, no action is required to receive a check. Some individuals, including seniors and others who do not typically file a tax return, will need to complete and submit a simplified tax return in order to receive a stimulus check. General information can be found here.

For those who wish to receive their stimulus payment electronically, the Treasury is working on an online portal for individuals to provide their banking information to the IRS. Alternatively, individuals can receive their stimulus check in the mail.

Detailed information and updates on stimulus payments can be found here.

Calculate your estimated stimulus payment.

Some individuals, including seniors and others who do not typically file a tax return, will need to complete and submit a simplified tax return in order to receive a stimulus check.

Expanded Unemployment Insurance

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) expands unemployment benefits to include part-time and self-employed workers, including contractors and gig workers. It also supplements state benefits with an additional $600 per week, which more than doubles the weekly maximum unemployment benefits in most states.

For more information visit the PA Office of Unemployment website.

Extended Filing and Payment Deadlines

All individual tax return and payment deadlines, including Federal, PA, NJ, NY, and PA local authorities, among others, have been extended. Estimated payments due on April 15, 2020 are also included in this tax relief initiative.

All tax returns and payments due April 15, 2020 have been extended to July 15, 2020. If you typically make an estimated payment on April 15, you won’t need to make that payment until July 15. Tax returns and payments due on other dates are not extended at this time, therefore, if your 2nd estimated payment is due on June 15, 2020, it is still due on that date. So technically, you may be paying your second estimated payment before your first estimated payment. Be sure to include the proper stub with your estimated payment or note on your check or electronic payment which quarter’s estimate you are making.

The City of Philadelphia is asking taxpayers to file and pay their taxes by April 15, 2020; however, they have indicated that they will honor the federal extensions of the deadline to file and pay until July 15, 2020 for Business Income and Receipts Tax and the Net Profits Tax. More information can be found here.

For more information on tax deadlines and extensions visit these links:

IRS

PA Department of Revenue

NJ Division of Taxation

For information on local tax deadlines and extensions, please check the website of your local tax authority.