Delayed Payment of Employer Payroll Taxes

Taxpayers (including self-employed taxpayers) will be able to defer paying the employer portion of certain payroll taxes through the end of 2020, with all 2020 deferred amounts due in two equal installments, one at the end of 2021, the other at the end of 2022.  The deferral applies to the applicable employment taxes for the […]

HSA Relief and Non-prescription Medical Products

Health Savings Accounts (HSAs) have both advantages and disadvantages relative to Flexible Spending Accounts when paying for health expenses with untaxed dollars.  One disadvantage is that a qualifying HSA may not reimburse an account beneficiary for medical expenses until those expenses exceed the required deductible levels.  The IRS has announced that payments from an HSA […]

Exclusion for Employer Payments of Student Loans

An employee currently may exclude $5,250 from income for benefits from an employer-sponsored education assistance program.  The CARES Act expands the definition of expenses qualifying for the exclusion to include employer payments of student loan debt made before January 1, 2021.

Tax Credits and Tax Exemption to Lessen Burden of COVID-19 Business Mandate

On March 18, 2020 President Trump signed into law the Families First Coronavirus Response Act (FFCRA), which eased the compliance burden on businesses.  The FFCRA include the four tax credits and one tax exemption discussed below. Payroll Tax Credit for Required Paid Sick Leave (the payroll sick leave credit) The Emergency Paid Sick Leave Act […]

Filing and Payment Deadlines Deferred

After briefly offering more limited relief, the IRS almost immediately pivoted to a policy that provides the following to all taxpayers including individuals, trusts, estates, partnerships, associations, companies and corporations regardless of whether or how much they are affected by COVID-19: For a taxpayer with a Federal income tax return or a Federal income tax […]

Charitable Deduction Liberalizations – Corporations

The CARES Act makes four significant liberalizations to the rules governing charitable deductions, 2 of which affect corporations: The limitation on charitable deductions for corporations that is generally 10% of (modified) taxable income doesn’t apply to qualifying contributions made in 2020.  Instead, a corporation’s qualifying contributions, reduced by other contributions, can be as much as […]

Charitable Deduction Liberalizations – Individuals

The CARES Act makes four significant liberalizations to the rules governing charitable deductions, 2 of which affect individual taxpayers: Individuals will be able to claim a $300 above-the-line deduction for cash contributions made, generally, to public charities in 2020.  This rule effectively allows a limited charitable deduction to taxpayers claiming the standard deduction. The limitation […]

Waiver of Required Minimum Distribution Rules

The required minimum distributions that otherwise would have to be made in 2020 from defined contribution plans (such as 401(k) plans) and IRAs are waived.  This includes distributions that would have been required by April 1, 2020, due to the account owner’s having turned age 70 1/2 in 2019.

Waiver of 10% Early Distribution Penalty

The additional 10% tax on early distributions from IRAs and defined contribution plans (such as 401(k) plans) is waived for distributions made between January 1, 2020 and December 31, 2020 by a person who (or whose family) is infected with the Coronavirus or who is economically harmed by the Coronavirus (a qualified individual).  Penalty-free distributions […]

Recovery Rebates for Individuals

To help individuals stay afloat during this time of economic uncertainty, the federal government will payments up to $1,200 to eligible taxpayers and $2,400 for married couples filing joint returns.  An additional payment of $500 will be sent to taxpayers for each qualifying child dependent under age 17 (using the qualification rules under the Child […]