Updates on the CARES Act
Last week, President Trump signed into law, the CARES Act, which contains numerous new tax rules that apply for tax year 2020. Part of the CARES Act includes the provision for sending out stimulus payments to provide much needed financial support to taxpayers.
Here is a brief recap of the new tax rules enacted to provide relief to taxpayers:
Certain student loan payments are suspended and no additional interest will be calculated through September 30, 2020.
Distributions from IRA’s and 401(k)’s in 2020 have many tax-favorable options that you can utilize.
Required minimum distributions (RMD’s) to be distributed to taxpayers in 2020 can be postponed.
Charitable donations get a new favorable tax write-off for non-itemizers and for C corporations.
Net operating loss carry-forwards get more favorable tax treatment, and new net operating losses incurred are eligible for carry-back to prior years in order to generate tax refunds.
For employers whose operations are fully or partially suspended, due to a governmental shut-down order, or businesses that stay open but experience a substantial decline in revenues, there is a payroll tax credit available to help offset the payment of payroll taxes during year 2020.
For employers who continue to pay wages to employees, a portion of the employer matching amount of payroll taxes for the rest of 2020 can be postponed, and not remitted by the employer until the end of year 2021 and year 2022.
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