The coronavirus has upended ordinary life as we know it. Many people are experiencing financial hardships and have questions regarding their personal finances. With Congress recently approving a $2 trillion economic stimulus package, let’s take a deep dive into what laws have been altered and how this may affect you.
Approximately $250 billion has been earmarked for personal cash payments. Individuals are eligible for checks up to $1,200 and married couples filing jointly are eligible for checks up to $2,400, with an extra $500 for each child. Eligibility for recovery checks is reduced starting at $75,000 in 2018 income for individuals and $150,000 in 2018 income for joint filers. Individuals with 2018 income exceeding $99,000 and joint filers with 2018 income exceeding $198,000 are ineligible.
Other changes include:
- The tax filing deadline of April 15 has been extended to July 15. Individuals required to make estimated tax payments can now postpone them to October 15.
- Retirement account rules are now loosened. Older Americans who are subject to mandatory minimum distributions from their retirement accounts can now keep capital invested instead of being forced to cash out for 2020.
- The bill waives the 10% penalty on coronavirus-related early distributions from 401(k)s and IRAs, which applies to distributions made at any time during 2020.
As you can see, in addition to personal payments, the coronavirus has impacted everything from retirement accounts to tax filing dates.