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Recovery check distribution amounts—Single taxpayers will receive $1,200 and joint taxpayers will receive $2,400. There is an additional $500 for each qualifying child.
The recovery check is considered a credit for 2020, but paid in advance.
The amount is reduced (but not below zero) by 5% of each dollar a person’s adjusted gross income (AGI) exceeds. Consider the following:
Consider the following example:
Other key details for recovery check eligibility include:
Any employee who was furloughed or part of a layoff is eligible for state unemployment. Details are as follows:
Ability to withdraw up to $100,000 retirement in 2020 for COVID-19-related purposes without 10% penalty—The distribution is taxable over a 3-year period unless electing to pay it back within 3 years. This essentially equates to a loan unless it is not paid back within the
3-year timeframe. This rule applies to individuals:
Waived required minimum distributions (RMD) from individual retirement accounts—The required minimum distribution for 2020 has been waived. If a retiree elects to take an RMD, this must happen by April 1, 2020—otherwise, the same penalty for late withdrawal will be applied.
Above-the-line charitable contribution—For tax year 2020, if a taxpayer does not itemize deductions, they can deduct up to $300 in addition to standard deduction for cash charitable contributions (no stock contributions).
Charitable contribution limitation by AGI—The 60% adjusted gross income limitation has been removed for 2020 (other than from donor advised funds).
The professionals at Harris, Hardy & Johnstone, P.C. are here to answer your questions. Please contact us below: