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Congress Recently Passed the CARES Act

The Act includes many different provisions to help taxpayers navigate our current situation. In addition to the CARES Act there have been other changes to items typically subject to the April 15th tax deadline.

Here are a few of the areas we believe will have the greatest impact on our clients. 

  • The U.S. Treasury has announced that the tax filing deadline for returns typically due April 15, 2020 has been extended through July 15, 2020. Tax returns filed by this new deadline will be considered timely filed and will not be subject to any underpayment penalties or interest. Many (but not all) states are also following this new tax deadline. Please feel free to contact us if you are unsure of your states filing deadline. 
  • With the change in the filing deadline to July 15, 2020, individuals are also able to defer their IRA contributions until this new filing deadline as well. This helps taxpayers free up cash for the additional ninety days while still allowing them to make contributions to their retirement account. 
  • A major part of the CARES Act will be the issuance of recovery rebates up to $1,200 per taxpayer ($2,400 for joint filing). There is an additional rebate of $500 for each child under the age of 17. The rebates are based on your 2018 adjusted gross income and will be subject to a reduction for those with AGI’s of $75,000 or more for individuals and $150,000 or more for joint filers.  
  • The Act has also provided relief for those needing to take distributions from retirement accounts. Individuals may take coronavirus related distributions up to $100,000 without being subject to the 10% early distribution penalty. The tax on these distributions will then be spread over a three-year period or the individual can choose to repay the distribution during that same three-year period to avoid taxation. 
  • Individuals who are required to take a retirement plan Required Minimum Distribution (RMD) during 2020 may also elect not to do so without any penalty. In addition, those who have already taken their distribution in 2020 may return those funds to their account. If the funds were taken in the last sixty days, the individual can simply write a check to return the funds to their account. If the funds were taken prior to that, the individual would have to show that they are impacted by the crisis and fall into the categories detailed as a coronavirus related distribution similar to the early distribution described above. For details on these guidelines please feel free to contact us at Hippo Tax Services. 
  • While many taxpayers are now taking standard deductions based on the current tax law, the Act will allow individuals who do not itemize to take a deduction of up to $300 for their qualified charitable contributions. This is in addition to the standard deduction. For those that do itemize the Act also suspends the limitations currently in place for charitable contributions based on adjusted gross income.

  • Please check with your Curran Wealth relationship manager,

    or contact Curran Wealth Management if you have any questions.  
     518.391.4200 •

    The material contained in this article is for educational and informational purposes only.  The information herein is considered to be obtained from reference sources deemed reliable, but no representation or warranty is made as to its accuracy or completeness.  This article is not, and should not be regarded as “investment advice” or construed as a “recommendation” or an offer to buy or sell a security.  The information contained in this article may not apply to your personal circumstances.  Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation.  Information on taxes is based on the tax laws existing at the time of publication.  Tax laws are subject to continual change.  In addition, tax laws vary by state.  This article is not, and should not be regarded as tax or legal advice.  We cannot ensure tax consequences of any transaction.  If you would like a detailed analysis of your tax situation, with specific tax recommendations, you can discuss the possibility of pursuing a formal relationship with Hippo Tax Services, LLC.