Tax Update & CARES Act

Our tax team has been working both remotely and on-site to complete returns, answer client questions and understand the new tax filing landscape and the details of the CARES Act. Here are a few highlights you may find helpful.

Tax Filing and Payment Deadlines
The tax FILING and PAYMENT deadlines have been extended to July 15, 2020. This is for both Federal and New York state returns. Most other states are also following the extension, however, I encourage you to ask your tax advisor about the specifics of other states.

Estimated Payments
Federal and NYS Estimated payments typically due on April 15, 2020 have been extended to July 15, 2020. There is no guidance on the second quarter which due date remains currently at June 15, 2020. Please consult your tax advisor for deadlines regarding estimates for other states.

2019 Tax Payments
If you have already filed your 2019 return and you have a voucher to send in with payment, you can delay mailing that payment until July 15, 2020.

If you have set up an automatic withdrawal option on your return, you are able to CANCEL that payment up to 2 business days prior to the date selected for automatic withdrawal. Here are the steps:

(1) Call IRS @ 1-888-353-4537

(2) Have your social security number, filing status, scheduled date of withdrawal, and bank account number ready to be entered into the system

(3) Note that you cannot change the date; you can only cancel the withdrawal. This will mean you will need to make alternate arrangements to make the payment (voucher or IRS online payment). To make an online payment you can go to

IRA/HSA/MSA Contributions
You typically have until April 15, 2020 to make an IRA, SEP, Roth, HSA and MSA contributions and have that contribution count for the 2019 tax year. This has also been extended to July 15, 2020.

HFA Tax Meeting/Filing Protocol
In an effort to keep everyone safe, we will not be conducting any face to face meetings at this time. We are allowing for drop-offs at our office and we will remain open with very limited staff. Documents can also be mailed or emailed. If you have questions about this process, contact Jennifer Vogler @ 935-5308.

CARES Act Rebates/Credits
Under the newly signed CARES Act, eligible individuals* are allowed an income tax credit for 2020. This will come, for most, in the form of a check or direct deposit. Here are the amounts and qualifications for the credit:

$1200.00 for eligible individuals
$2400 for eligible individuals filing a joint return
$500.00 for each qualifying child of the taxpayer (this is a child who is under 17 years of age and qualifies as the taxpayer’s dependent)

Phaseout of the credit
The amount of the credit is reduced (but not below zero) by 5% of the Taxpayer’s Adjusted Gross Income (AGI) in excess of:

(1) $ 150,000 for joint returns
(2) $ 112,500 for head of household
(3) $ 75,000 for all other taxpayers

*Eligible individual is any individual excluding (1) nonresident aliens, (2) individuals who can be claimed as dependent by another taxpayer, and (3) an estate or trust. An eligible individual must also have a valid social security number. Individuals with ITINs are ineligible.

Tax year used to figure the advance credit
The tax year used to figure the advance credit will be 2019 if you filed or 2018 if you have not filed 2019 as of yet. Please note that the credit is ultimately based on the 2020 AGI, so if you did not receive a payment or received a reduced payment based on 2018 or 2019 numbers and you qualified for a higher amount in 2020, you will be able to claim the balance of the credit on the 2020 return. Our understanding of the rules also indicates that if you received more than you were entitled to, you will NOT have to pay back the excess.

What if you are not required to file a tax return
For many taxpayers, there is no requirement to file a tax return based on their income levels. If you do not file a return and you are receiving social security, the IRS will use the data from your Social Security Statement. In this instance, you do not have to file a tax return in order to receive the rebate.

Rebate payment method
IRS will make the payments electronically to any account to which taxpayer authorized on or after January 1, 2018 for the delivery of a refund or of a tax payment. They will be mailed to the last known address of the taxpayer if there is no bank information. No later than 15 days after distributing the rebate payment, IRS will mail a notice to the taxpayer’s last known address indicating how the payment was made and the amount of the payment.

2020 required minimum distributions (RMDs)
If you are required to take an RMD in 2020, this requirement is waived for 2020. You will NOT have to take your RMD in 2020. We will provide more detailed information on this provision of the Act in subsequent communications.

Charitable deductions
The act adds an “above the line” deduction for qualified charitable contributions not to exceed $ 300.00 if you are taking the standard deduction.

Ongoing analysis and resources
We will be creating a page on our website dedicated to communications and information on the CARES Act, taxes, markets, and any updates to our current operations. This should be up and available later this week. If you have any questions, please reach out to your advisor or tax preparer.