There is always a healthy debate about the role of government in people’s lives during normal times. Yet, it is in times of crisis when we turn to the government for help.
Right now, were are in one of the most devastating crises in our nation’s history. The COVID-19 pandemic has caused us to employ extraordinary safety and health measures, and the economic fallout from having to social distance may result in an economy that is worse than the Great Depression.
Congress, however, recently passed legislation to help the country through this health crisis. In this article, we will discuss those legislative provisions that will provide stimulus money directly to individuals. We we also talk about any tax issues that may surround those payments.
If after reading this blog, you have additional questions about your need for a tax strategy attorney for individuals in Florida, please contact The Law Office of Mary King, P.L. We are attorneys who are laser-focused on tax strategies in Florida. We provide services in all areas from debt settlement to planning. Also, we are experienced as tax strategy attorneys for individuals in Florida. Call today at 941-906-7585, or fill out our contact form. We are here to help you.
The CARES Act
Congress just passed, on March 27, 2020, an economic stimulus package to help the country weather this economic downturn. That is the $ $2.2 trillion stimulus package you may have heard about in the news. The legislation, called the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is meant to provide economic stimulus nationwide so that, among other things, individuals can receive money to help pay bills during the crisis.
Specifically, under the CARES Act, about $425 billion is earmarked as a fund to be distributed by the U.S. Treasury as direct payments to individuals and families who qualify.
Individuals making $75,000 or less per year will receive a so-called “economic impact payment,” which is a $1,200 check (or direct deposit). Married couples with a combined income below $150,000 will get $2,400. Also, families with children will receive an additional $500 per child under the age of 17.
The amount of the payment gradually decreases as an individual’s income gets closer to $99,000, or $198,000 for married couples. The bill also limits foreclosures and evictions of renters during the time of the crisis.
In addition, the maximum weekly unemployment benefit, until July 31, 2020, will increase by $600 per week, with the government fully funding that increase, so employers do not need to pay more in unemployment benefits.
Is the Economic Impact Payment Automatic?
The answer to the question is “it depends.” If you are an individual taxpayer who filed tax returns in 2018 and 2019, then the Internal Revenue Service (IRS) already knows your contact information and income over those years. Therefore, you do not need to take any further action to receive the $1,200 ($2,400) economic impact payment.
In addition, those individuals who receive Social Security retirement, disability (SSDI), or survivor benefits, as well as those who receive Railroad Retirement benefits, do not need to take any action. The economic impact payment is also automatic.
However, the stimulus money, or economic impact payment, is also available for those individuals who did not file tax returns in 2018 or 2019 for certain reasons. In particular, for people who had gross income that did not exceed $12,000 ($24,000 for married couples) for 2019, and those not otherwise required to file a federal income tax return for 2019, and didn’t plan to, you can request an economic impact payment if you go to this IRS website.
If you moved since you last filed your tax returns, then you may want to go to this IRS webpage to update your contact information. The payments should be released in mid-April 2020.
What Other Coronavirus Aid Might be Available to Me?
In addition to the CARES Act, Congress also passed, one week prior, the Families First Coronavirus Response Act (FFCRA), which allows employers with fewer than 500 employees to provide those employees with paid leave, either to assist the employee’s own health needs, or to care for family members.
The FFCRA legislation is helpful so that employers can keep their workers on the payroll, while making sure that workers do not need to choose between getting paid and staying at home to avoid the spread of the virus.
Specifically, under the FFCRA, employees may receive up to 80 hours of paid sick leave for COVID-19 related reasons. Also, employees could receive expanded paid child care leave if employees need to take care of children while their school or child care center is closed due to COVID-19.
Are There Tax Implications to These New Laws?
The good news with the economic impact payment of $1,200 is that, according to Money magazine, it is not considered income. Therefore, it will not be taxable, and it will not affect your income tax bracket for 2020. Also, the payment is not simply an advance on the refund you would receive for you 2020 taxes.
That said, if you have questions about tax liability, or if you are dealing with tax debt from previous years, you may want to discuss your tax issues with a seasoned tax strategy attorney for individuals in Florida. There are a number of ways that you may benefit from the CARES Act and other legislation, and a tax strategy attorney for individuals in Florida will be able to assist you.
Get the Help of an Experienced Attorney to Handle Your Tax Planning in Florida
If you have questions about COVID-19 legislation, are struggling with back taxes, or if you are a business that needs to plan tax payments throughout the year, then you need the help of an attorney who has experience with tax planning attorney in Sarasota, Florida. The Law Office of Mary King P.L., can help. We are experienced tax strategy attorneys for individuals in Florida, and we offer complete services in all areas from tax implications of alimony to planning the most efficient tax strategy for individuals and businesses.
Call our IRS problem-solving services firm in Florida today to schedule an initial consultation. With years of experience, the Law Office of Mary E. King can make sure that your tax issues are resolved in your favor. Fill out our online contact form, or call us at 941-906-7585.