The economic impact of coronavirus can particularly affect retired people on fixed incomes. Retirement accounts have lost value, and savings accounts are likely to earn even less interest than in the recent past. However, social security and health insurance programs have recently been changed to try to support retirees.
Here is how the COVID-19 pandemic can affect retirees financially:
A check for $ 1,200 ($ 2,400 for couples and potentially more for those with dependent children) will be deposited or issued directly to each employee with a social security number that manages less than a certain income limit, even if this is not the case they had taxable income in the most recent tax returns. As a general rule, Americans should take no steps to receive a refund check. However, it is feared that those who have not made a direct deposit with the IRS will not receive the check for several months.
Who qualifies? The recovery rebate is available for those who have no income and for those who have income from non-taxable benefit programs, such as social security. Every American resident in the United States (with a valid identification number), who had up to $ 75,000 of adjusted gross income (AGI) in 2018 or 2019 (the most recent year in which you filed your taxes), will receive a payment a single tax of $ 1,200, while married couples with an increased adjusted gross income of up to $ 150,000, will receive $ 2,400. Also, taxpayers will receive an additional $500 for each child under the age of 17. For individuals and families with income above their limit, assistance payments will be reduced by $ 50 for every $ 1,000 of AGI. This means that couples with incomes over $ 198,000 and those with incomes over $ 99,000 will not be eligible.
The obligation to withdraw the required minimum distributions (RMD) from the pension accounts before the levy of tax for the calendar year 2020. The exemption also applies to those who have already carried out the RMD planned in the first quarter of the year, by reinvestment within 60 days of the distribution, or if there are more than 60 days, by a relief of the difficulties. In cases where someone who was 70 and a half in 2019 but who did not take RMD, can no longer take their 2019 or 2020 RMD.
Who qualifies? Everyone is subject to the required minimum distributions. Typically, this means that any American who is 72 years old at the start of the year with funds in a deferred tax account, such as 401 (k) or IRA, does not need to withdraw a certain percentage from these funds and is subject to tax. The RMD rules are especially complex because the SECURE Act (adopted in December 2019) has increased the age at which RMDs should start from 70½ to 72 years old, so it probably makes sense to contact a tax advisor for your specific situation.
The maximum loan amount for a 401 (k) retirement account for those affected is now $ 100,000, compared to $ 50,000 before the CARES Act. All loans due in 2020 are now spread over one year. Also, before the CARES Act, once the balance of a purchased plan exceeded $ 20,000, a person was entitled to a loan of up to 50% of this amount (up to a normal maximum of $50,000). CARES Act modifies this rule for the persons concerned, allowing them to grant a loan equal to the balance of the plan purchased, dollar, up to a maximum amount of $ 100,000.
Who qualifies? Anyone interested in a loan from a pension plan or wishes to borrow from its plan. The terms and availability of a 401 (k) loan differ from plan to plan, so it probably makes sense to contact the plan's employer or administrator for more information. Remember, you do not necessarily have to take out a loan from your 401(K) account because you can.
The deadline for filing and paying federal income tax has been extended by three months, from April 15, 2020, to July 15, 2020. This means that you have about three additional months to contribute to the 2019 IRA.
Who qualifies? All Tax filers
