Financial Planning Issues from Covid

Federal Income Taxes

The IRS has moved the April 15th Federal income tax filing and payment deadline to July 15th.  This extension is automatic and does not require any additional forms.  Taxpayers with a liability due can defer payments without penalties or interest until July 15th.  Individuals who anticipate a tax refund are still encouraged to file as soon as reasonably possible.

A Q&A on this provision and other tax relief programs has been made available here:https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers

IRA Contributions

In addition to the IRS filing deadline extensions, the postponement to July 15th means that the IRA contribution deadline for the 2019 tax year is also extended to July 15th.

Student Loan Payments

Loans owned by the US Department of Education will have interest waived automatically.  Monthly payments will not change, the full amount will be applied to principal.  Interest will be waived for at least 60 days from March 13th.

Borrowers may also ask for administrative forbearance which temporarily stops payments, again for at least 60 days.  Private student loans are not eligible for these benefits – though many private lenders are offering their own assistance options.

This is the official site to reference the information presently available on the Federal options:  https://studentaid.gov/announcements-events/coronavirus

 

State Income Tax Extensions

Most states have now followed the Federal change in filing and payment due date from April 15th to July 15th  Below is as detailed a summary on specifics as is presently available.

State filing relief/revised due dates in response to Coronavirus – 36 states (including DC) [AL, AR, AZ, CA, CO, CT, DC, DE, GA, IL, IN, KS, KY, LA, MA, ME, MD, MI, MN, MO, MT, NC, ND, NE, NM, NY, OH, OK, OR, PA, RI, SC, TN,UT, WI, WV] and USVI have changed from 4/15 to 7/15 filing and payment deadlines for Coronavirus pandemic.

Note: CT and MN business deadlines not 7/15. – 7 states [IA (7/31), HI (7/20), ID (6/15), MS (5/15), OR (4/30), VA (6/1), WA (6/15)] and Puerto Rico (6/15) changed to other filing and payments deadline for Coronavirus pandemic

7 states not impacted for individual income taxes – no personal income tax (AL, FL, NV, SD, TX, WA, WY), and 2 states no tax on wages (NH and TN – interest and dividends) (41 states have personal income tax) – 2 states (SD, WY) no corporate income tax and no gross receipts tax, – 4 states (NV, OH, TX, WA) have gross receipts taxes instead of corporate income taxes.

 

Data Security and Privacy

Security firms have noted an uptick in fraud attempts, particularly online as many are working from home.  Please try to say vigilant in handling personal and financial information with your online communications.

 

Upcoming Legislation

A substantial stimulus and emergency relief package has been passed by Congress and has been signed by the President. 

Negotiations for the bill touched upon a wide range of benefits for individuals, corporations, and the overall economy.  Federal agencies may need time to interpret rules and establish regulations after the bill is passed.  

CARES Act Guide for individuals, and CARES Act Guide for Employers and Employees are available on this page.