As a result of COVID-19, there are several tax changes that can benefit taxpayers and businesses. Here are a few highlights:
Extended Tax Deadlines
Both federal and Kansas tax deadlines for 2019 have been extended to July 15, 2020, without additional interest or penalties. This also allows filers additional time to contribute to an IRA for 2019. The IRA contribution limit for 2019 is $6,000, with an extra $1,000 catchup contribution allowed for filers who are 50 or older.
Deductible Charitable Contributions
To encourage charitable contributions in 2020, the CARES Act made changes to how contributions can be deducted.
- For 2020, filers who do not itemize can deduct up to $300 in cash charitable contributions given to a 501(c)(3) public charity. Please note that for all contributions above $250, you must get a receipt.
- The Act also allows filers who itemize to deduct qualified cash contributions to charities of up to 100% of the adjusted gross income (AGI) in 2020.
Tax Rebates
The CARES Act added new tax rebates for 2020. The full rebate is $1,200 for single filers, $2,400 for married couples filing jointly, and $500 for each qualified child under age 17. This rebate is, however, phased out for higher income filers (beginning at $75,000 single and at $150,000 for married filing jointly). Go to Get My Payment to check on the status of your rebate.
Employee Retention Credit for Businesses
If your business had to suspend operation during 2020 due to a government order related to COVID-19, you may be eligible for a fully refundable tax credit equal to 50% of qualified wages paid to employees. The total credit is limited to $5,000 per employee. This credit is also available for businesses that experienced a significant decline in gross receipts during 2020.
