As the world struggles to adapt to the new realities of COVID-19, aid has come from many areas of society. Businesses, non-profits, and governments around the world are stepping up to care for others amid this global crisis. In the United States, one major outlet for aid came last week in the CARES Act. The roughly $2 trillion stimulus package intends to ease the burdens brought by the coronavirus pandemic across all sectors of the economy. It also gives you another opportunity to help your clients who are impacted by COVID-19.
As a tax and accounting professional, you may be looking for ways to contribute to your community, serve your clients better, and help ease financial anxiety during this time. If that is the case, the CARES Act is an opportunity for you to come alongside your clients and help them take advantage of the many opportunities it provides.
CCH Axcess iQ provides the tools you need to educate yourself and your clients on this wide-ranging legislation as well as identify those clients who may be affected by its many provisions. Below are a few titles added in the past few days (with more to come) that help you reach that goal. Each title includes in-depth content providing information on the details of the legislation as well as a list of clients who would be impacted by the event. With the most relevant clients identified, use the accompanying client letter to engage with your clients.
All these tools give you a head start on reaching out to clients who have been impacted by COVID-19 and may need your advisory services to take full advantage of the benefits of the CARES act.
CARES Act: Modifications for Net Operating Losses
Normally, NOLs arising in tax years beginning after 2017 may only reduce 80 percent of a taxpayer’s taxable income in carryback and carryforward years. However, under the CARES Act, net operating losses (NOLs) arising in tax years beginning in 2018, 2019, and 2020 now have a five-year carryback period and an unlimited carryforward period. This presents a strategy for corporations and individuals with net operating losses in 2018 or 2019.
CARES Act: Recovery Rebates for Individuals
Under the CARES Act, individual taxpayers will receive advance refunds of credits against 2020 taxes equal to $1,200 for individuals, or $2,400 for joint filers, plus $500 for each qualifying child. This event provides a tax strategy for individuals who are not dependents and reported adjusted gross income less than $198,000 for MFS, $136,500 for HOH, or $99,000 for all others in 2018 or 2019.
CARES Act: Special Rules for Use of Retirement Funds
The CARES Act waives the 10-percent penalty on early withdrawals up to $100,000 from qualified retirement plans for coronavirus-related distributions. Identifying individuals with IRA and ABLE account or 401(k) and employer-sponsored plan contributions greater than $0 or individuals with retirement distribution greater than $0 in 2018 or 2019 provides an opportunity to engage with those clients.
Learn how CCH Axcess iQ can help you identify clients impacted by COVID-10 guidance. Contact a Solutions Consultant or register for a demonstration today.