Proposed Relief in Troubled Times

When daily life is interrupted, one of the main concerns of the general public is how they are going to afford getting through certain roadblocks. Due to the COVID-19 virus sweeping throughout the nation, the government has proposed a plan of relief to help individuals through the most current block: The Coronavirus Aid, Relief, and Economic Security Act (CARES). Since most workplaces in Pennsylvania are closed, it is important to know the details of the proposed relief plan.

At its base, the act would provide a $1,200 check for individuals who make up to $75,000 a year. For couples that make up to $150,000, $2,400 is the base amount of the check, though an additional $500 is added per dependent. These payments would decrease for individuals making over $75,000, capping out at an income of $99,000 for an individual or $198,000 for couples, respectively.

In addition, under the CARES Act, unemployment insurance benefits would rise for the next four months. It would also extend these benefits to those such as gig economy workers and freelancers, people who normally do not qualify for unemployment insurance. The bill would increase the unemployment benefit by a maximum of $600 a week.

The amount in that the CARES Act would provide through the check is dependent on the information from your most recent tax returns. For those who have already filed for 2019, the rebates would be calculated for using those returns. If you haven’t yet filed for last year, 2018’s information will be substituted in. For those relying on Social Security benefits, your benefit information may be used.

The IRS encourages anyone with a tax-filing obligation who hasn’t filed a tax return for 2018 or a previous year to act now. This includes certain potential credits and rebates for those who have filed a return for 2018 and/or 2019. Those without 2018 tax filings on record could potentially affect mailings of stimulus checks. And more than 1 million people who haven’t filed tax returns for Tax Year 2016 and are owed a refund still face an April 15, 2020, deadline to file their return. This deadline hasn’t been extended. Current law requires the 2016 return to be filed by April 15, 2020.

The IRS is encouraging non-filers to consider contacting a tax professional to consider various available options since the time to receive such refunds is limited by statute. Once delinquent returns have been filed, most taxpayers have the opportunity to resolve any outstanding liabilities by entering into an Installment Agreement or an Offer in Compromise with the IRS to obtain a “Fresh Start

Remember, ITP Taxes LLC is with you all the way, even if social distancing means that face-to-face meetings aren’t ideal. You are always free to reach out through phone call or email if there is anything that we can do to help you.