A tax rebate of up to $1,200 to each American.

• $1,200 for single adults
• $2,400 for married couples filing jointly
• $500 for children under age 17. The rebate is not limited to those who pay or owe taxes or file tax returns.
  

Phase out of Rebate:

• The rebate is phased out singles with income over $75,000 and married couples with joint income over $150,000. The rebate is reduced $5 for every $100 income exceeds these thresholds, therefore, singles with income over $99,000 get no rebate; married couples with income over $198,000 get no rebate.
  The phase-out is based on the 2019 income shown in your filed tax return. If you haven’t filed a return for 2019, your 2018 return is used. You don’t have to file any form to get this rebate. It will be automatically deposited in your bank account or a check will be mailed to you.

People who are not on Social Security and do not file tax returns:

For those who didn't file because they didn't make enough money or are homeless, recently incarcerated, or otherwise not on file with the IRS, the IRS has created a Non-Filers page on its website where you can create an account so that you get your rebate.

If you have an IRA or a 401(k), or other tax qualified retirement plan, you would ordinarily have to pay income taxes on the withdrawal plus a 10% penalty on the amount withdrawn if you were not 59 1/2.

However, the CARES Act permits you to take a “coronavirus-related distribution” of up to $100,000 in 2020 without paying the penalty. if:

• You, your spouse, or a dependent are diagnosed with SRS-COV-2 or COVID-19, or
• you experience adverse financial consequences as a result of being quarantined, furloughed, laid off, having work hours reduced, or being unable to work due to lack of child care.

You don’t have to provide a doctor’s note or other proof to your plan administrator—a certification made by you is sufficient.

You must still pay regular income tax on the distribution, but you have three years to do so, beginning with 2020. In addition, you don’t have to pay any tax at all on the distribution if you repay the amount to your retirement plan within three years after receiving it.

Instead of withdrawing money from your retirement plan, you can borrow it. When you do so, you must pay it back. There is an annual limit on how much you can borrow. The CARES Act has increased this amount from $50,000 to $100,000 for the next six months.

Normally, each year, individuals who are over 72 years of age must take required minimum distributions (RMDs) from their defined contribution plans, such as 401(k)s, 403(b)s, 457(b) plans, and IRAs. Failure to do so results in a stiff penalty. However, the CARES Act suspends such RMDs for one year. Therefore, you can delay taking your RMD until 2021. The one-year delay applies to both 2019 RMDs that needed to be taken by April 1, 2020 and 2020 RMDs.

The CARES Act allows taxpayers to deduct up to $300 in charitable contributions without itemizing. In other words, this is an above the line deduction which reduces your adjusted gross income.

The contributions must be made in cash to 501(c)(3) public charities. This change in the law is permanent; it applies to 2020 and all future years.

Wealthier Taxpayers Who Do Itemize:

For wealthier taxpayers who itemize deductions, the CARES Act increases the annual income limits on deducting charitable contributions.

For 2020 only:

• Taxpayers can deduct charitable contributions up to 100% of their adjusted gross income, increased from 50% of AGI.
• Corporate taxpayers may deduct up 25% of adjusted taxable income, increased from 10%.

The CARES Act allows employers to pay up to $5,250 of an employee’s 2020 student loan payments. Such payments are tax-free to the employee. However, if your employer makes such payments on your behalf, you can’t deduct the interest on such loans.

If you’re self-employed, you must pay a 12.4% Social Security tax on up to $137,700 in net self-employment income for 2020. You normally pay this tax as part of your quarterly estimated tax payments to the IRS. The CARES Act allows you to defer 50% of your Social Security taxes until the end of 2021 and 2022. If you choose to do this, you must pay 25% of the deferred amount by December 31, 2021 and 25% by December 31, 2022.

Net operating losses (NOLs) occurring during 2018, 2019, and 2020 may be used to offset 100% of other nonbusiness income earned during those years, rather than just 80% under the TCJA.

In addition, NOLs incurred during 2018 through 2020 can be carried back five years to reduce taxes paid in those years. This can result in a tax refund..

Excess Business Loss Deduction Limitation Imposed by the TCJA Eliminated:

The TCJA limited annual deductions of excess business losses by individual business owners during 2018 through 2025 to no more than $510,000 for married couples and $255,000 for singles.

The CARES Act has completely eliminated this limitation for losses incurred during 2018 through 2020. Thus, taxpayers with very large losses in any of these years can deduct them in full.

When Congress enacted the TCJA in 2017, it intended to help owners or renters of commercial buildings to quickly deduct interior improvements by allowing 100% bonus depreciation for such improvements and a shorter 15-year recovery period for depreciation.

Due to a drafting error, this change was never made. The CARES Act fixes this error, retroactive to January 1, 2018. This change should be particularly helpful for the restaurant industry. For example, if you own a restaurant and you paid to remodel the interior in 2018 or 2019, you can file an amended return and fully deduct your costs, resulting in a tax refund from the IRS.

Prior to 2018, businesses could deduct all the interest they paid without limit. However, starting in 2018, the TCJA allowed all businesses with average gross receipts of $25 million to deduct interest payments only up to 30% of their adjusted taxable income. The CARES Act increases this amount to 50% for 2019 and 2020.

The CARES Act provides an employee retention credit designed to help employers who keep paying their employees even though their business is closed or sales have declined by more than 50%.

This is a one-year only credit of up to $10,000 per employee paid against the employer’s 6.2% share of Social Security payroll taxes. The credit is refundable; employers who owe no taxes can still get the full amount.

Employers may also defer the employer’s share of 2020 Social Security payroll taxes (6.2% up to the annual ceiling) until 2021 and 2022.