Coronavirus-Related Tax Relief for U.S. Families and Individuals

Coronavirus-Related Tax Relief for U.S. Families and Individuals

  • Learn more about the extended date to file and pay taxes.
  • Find out how the IRS calculates your economic impact payment.
  • Learn how to receive your economic impact payment via direct deposit.
  • Discover how your filing status and AGI affect your payment.
  • Learn more about paid sick leave benefits granted by the Families First Coronavirus Response Act.
  • Find out how unemployment benefits have been extended as well as who is eligible.
  • Learn more about an additional payment (above state benefits) available for the unemployed.

As Americans and global citizens, we are living in unprecedented times with the onset of coronavirus (COVID-19) around the world. As we work to move through these difficult times together, the IRS has provided some coronavirus-related tax relief provisions for affected taxpayers. Fiducial gives you a look at what’s being offered.

Extended Due Date to File and Pay Taxes Provides Coronavirus-Related Tax Relief

The regular due date for filing your federal tax return is April 15th of any given tax year. Taxpayers, however, are generally only allowed to file for an extension to file their returns to October 15th of the same year. Although, please be aware, this is not typically considered an extension of time to pay any taxes owed.

Helpfully, this year Congress has provided some coronavirus-related tax relief for Americans. The IRS has extended the tax deadline for this tax season (tax year 2019) to July 15, 2020. It is important to note that this is an extension to both file and pay any taxes owed. This includes both taxes owed for the 2019 tax filing year and 2020 estimated federal tax payments.

Economic Impact Payments for Individuals and Families

Congress recently passed legislation that allows for direct payments to U.S. individuals and their families. Most payments will be based on 2019 tax information. If your 2019 return has not yet been filed, your 2018 tax return will be used. For those not required to file a tax return or for which the IRS does not have bank account information, the IRS has a portal where you may provide this information.

(Note: Non-filers can enter their information in the “Non-Filers: Enter Payment Info” form, available here.)

Do you receive Social Security retirement, disability (SSDI), survivors’ benefits, Railroad Retirement or veteran’s benefits? Then you do not have to provide this information as the IRS already has it on file. Those with information on file will receive direct deposit payments; however, anyone without readily available banking information will receive payment via check.

How filing status and AGI affect your economic impact payment

The amount of payment received depends on filing status and adjusted gross income.

  • Single taxpayers or those who file as married filing separately with gross incomes of less than $75,000 receive $1,200. This amount reduces by $5 for every $100 of income exceeding $75,000, phasing out completely at $99,000.
  • Married taxpayers with gross incomes of less than $150,000 receive $2,400. This amount reduces by $5 for every $100 of income exceeding $150,000, phasing out completely at $198,000.
  • Head of household taxpayers with a gross income of less than $112,500 receive $1,200. This amount reduces by $5 for every $100 of income exceeding $112,500, phasing out completely at $136,500.
  • Those with children under the age of 17 will receive an additional payment of $500 per child.

Please note that individuals who receive social security, disability or retirement benefits with children under 17, should utilize the online portal to make the IRS aware of each dependent.

Payments should start going out in the middle of April 2020. Recipients will receive a letter from the IRS regarding their economic impact payment within 15 days of payment.

face masks; coronavirus-related tax relief for Americans
Photographer: De an Sun | Source: Unsplash

Sick Leave for Individuals and Families Affected by COVID-19 – Families First Coronavirus Response Act

The Families First Coronavirus Response Act provides that individuals required to miss work due to Coronavirus-related illness or childcare leave may request up to 80 hours of paid leave from their employers. The government will provide complete reimbursement to employers for the cost of the leave.

Employees forced to miss work due to their children’s school closures may in some instances qualify for an additional ten weeks of pay at the same 2/3 of total pay in compliance with the expanded Family and Medical Leave Act.

Sick leave relief applies for employees who work for companies with fewer than 500 employees. For businesses with less than 50 workers, if the viability of the business would be threatened due to allowing leave for a child’s school closing and/or childcare being unavailable, the employer may qualify for an exemption to providing related childcare leave.

For full information on who qualifies for family and medical leave, as well as information on the employer effects of this legislation, click here or call your Fiducial representative.

Unemployment Benefits

Another benefit being provided as a result of the COVID-19 outbreak is an expansion of unemployment benefits. Here’s a quick summary of some of the changes:

Eligibility for the program has now been extended to include:

  • People who are unable to work because their employer has temporarily halted operations due to the outbreak
  • Those who have had to quit their jobs in order to care for vulnerable family members who are susceptible to the virus
  • Workers who have had to quit their jobs because of the risk of exposure to the virus and the risk of infecting vulnerable family members
  • People who have had to go into quarantine but are fully expecting to return to work after the quarantine period is over
  • Self-employed people
  • Independent contractors
  • Gig workers
  • People with a limited work history

Unemployed workers will receive an additional $600 per week over and above the state benefits for up to six months. This is an increase on what would normally have been received – the average at present is around $300 a week.

In these difficult times, it is important to understand the coronavirus-related relief options that are available to you and your family. Have more questions about coronavirus-related tax relief? Call Fiducial at 1-866-FIDUCIAL or make an appointment at one of our office locations. Ready to book an appointment now? Click here. Know someone who might need our services? We love referrals!

For more small business COVID-19 resources, visit Fiducial’s Coronavirus Update Center to find information on SBA loans, tax updates, the Paycheck Protection Program, paid sick and family leave, and more.