QuickList for 2020
Related to stimulus checks/Coronavirus
- Credit recalculations for taxpayers who may be entitled to a larger stimulus check amount. US Treasury used taxpayers' 2019 (or 2018) tax returns to determine eligibility for the initial stimulus check. But these checks are really based on the 2020 tax return: Those who would not be eligible (eg, income increased) or received in excess (eg, now not claiming a dependent in 2020) DO NOT have to repay; those who would be entitled to more credit will get the remaining amount.
- Stimulus checks are not taxable.
- Taxpayers affected directly or economically by the coronavirus can withdraw up to 10K from retirement accounts without penalty, elect to report the income over 3 years, and have option to reverse distribution during that time.
Retirement-related tax laws:
- Required minimum distributions not required until age 72.
- Contributions to traditional IRA allowed up to age 72.
- Scholarships/educational grants, etc considered compensation for determining allowed IRA contributions.
- Taxpayers with new child/adoption can take up to 5K IRA distribution without penalty.
- Threshold to deduct medical/dental expenses remain at 7.5% adjusted gross income rather than increasing to 10% AGI.
- Deductibility of mortgage insurance premiums retained.
- Deduction for cash-like charitable contributions up to $300 as an adjustment, regardless of itemizing or not; effective for 2020 only.
- 529 Plan distributions not used for education (ie, classes were cancelled because of the pandemic); can instead be used to pay student loans to avoid being taxed. Limited to 10K lifetime distributions.