CARES Act: Congress Approves Economic Relief Program for Individuals and Families
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law. The bill builds upon earlier versions of the CARES Act and is intended to be a third round of federal government support in the wake of the coronavirus public health crisis and associated economic fallout. It succeeds the $8.3 billion in public health support passed two weeks ago and the Families First Coronavirus Response Act. The CARES Act is designed to provide support to both individuals and businesses, including changes to tax and retirement account policies.
Several of the provisions are particularly relevant for Athena Capital’s investor client base, including:
Income Tax Filing and Payment Deadlines. The deadline for filing federal income tax returns and for making income tax payments due April 15, 2020 (including 1Q20 estimated payments) has been extended to July 15, 2020.
Gift Tax Filing and Payment Deadlines. The deadline for filing federal gift tax returns and for making payments of gift tax due April 15, 2020 has been extended to July 15, 2020.
Electronic Signature on Tax Documents. Until July 15, 2020, the IRS will accept scanned or photographed images of signatures and digital signatures on tax return documents and will allow documents submitted via email.
Retirement Account Required Minimum Distributions. Required minimum distributions (RMDs) from retirement accounts such as IRAs, 401(k)s and 403(b)s are waived for 2020, eliminating the need to sell assets and allowing them more time to recover in the markets.
Cash Contributions to Public Charities. In 2020, taxpayers may deduct contributions of cash made to public charities up to 100% of their adjusted gross income (AGI). This provision does not apply to contributions of cash to donor advised funds or to private foundations, to which previous AGI limits still apply.