We have developed several options for both personal and business clients who have been economically affected by the coronavirus outbreak. Some of these options include special loan arrangements, waiving fees, skip-a-pay arrangements, and extending credit lines. But, we’ll customize the solution to your situation. If you are experiencing financial challenges due to this situation, please reach out to your lender or personal banker. You can also text or call our Customer Care Department 7-days a week to learn more at 573-642-3322 or go here to send them a message.
Our Commitment To You
We take our position as a community bank seriously, and that means helping our clients and neighbors through challenges like this. Over our 163 years as a mid-Missouri bank, we have experienced many tough times. We’re here for challenges and moments like this.
Congress and the federal government have acted to help individuals and businesses get through this difficult time. The $2 trillion “Coronavirus Aid, Relief, and Economic Security” (“CARES”) Act was recently signed into law. The CARES Act is designed to help those most impacted by the COVID-19 pandemic, while also providing key provisions that will benefit many individuals including retirees. To put this monumental legislation in perspective, Congress earmarked $800 billion for the Economic Stimulus Act of the 2008 financial crisis.
Highlights of the CARES Act for Individuals
Please note that the following information is designed to provide accurate and authoritative information on the subjects covered. However, it isn’t intended to provide specific legal, tax, or financial advice. For specific professional assistance, please consult your attorney, accountant, or financial adviser.
Extension of federal tax filing due date. The IRS postponed to July 15, 2020 the due date for both filing an income tax return and for making income tax payments originally due April 15, 2020. The postponement is automatic. Payments that may be postponed are limited to federal income tax payments in respect of a taxpayer’s 2019 taxable year and federal estimated income tax payments due on April 15, 2020 for a taxpayer’s 2020 taxable year. The extension is available to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate entities, including those who pay self-employment tax. As a result of the extension, any interest, penalty, or addition to tax for failure to file or pay tax will not begin to accrue until July 16, 2020.
IRA contribution deadline extended. The deadline for making 2019 IRA contributions has also been extended until July 15, 2020.
HSA and MSA contribution deadline extended. The deadline for making 2019 contributions to health savings accounts (HSAs) and Archer medical savings accounts (MSAs) has been extended until July 15, 2020.
Recovery rebates. Cash payments called “recovery rebates” are available to U.S. residents with income below certain levels who cannot be claimed as a dependent of another taxpayer and who have a Social Security Number. Technically, the rebates are advance refunds of credits against 2020 taxes. The rebate amounts are $1,200 for individuals and $2,400 for married joint filers, with an additional $500 for each qualifying child under age 17. The amount of each rebate phases out by $5 for each $100 of adjusted gross income (AGI) greater than $75,000 (single filers) or $150,000 (married joint filers), based upon AGI as reported on the 2018 federal tax return (or 2019 tax return, if filed). Thus, rebates are fully phased out at $99,000 (single filers) and $198,000 (married joint filers). Individuals do not need to do anything to receive the rebate; the IRS will make payments electronically, if possible. If you haven’t filed for an electronic tax refund but you receive other government benefits, such as social security, electronically they will send your rebate the same way. If you’ve not done either of these things in the past, the Treasury has developed a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail. Registration and more information can be found here: https://www.irs.gov/coronavirus-tax-relief-and-economic-impact-payments
Required minimum distributions (RMDs). All 2020 RMDs from IRAs and retirement plans are waived, including RMDs from inherited IRAs (both traditional and Roth). The RMD waiver includes 2019 RMDs that were previously due by April 1, 2020.
Tax-favored early distributions from retirement plans. The CARES Act waives the 10% penalty applicable to early distributions for coronavirus related distributions up to $100,000 from IRAs and qualified defined contribution retirement plans such as 401(k), 403(b), and governmental 457(b) plans. A coronavirus related distribution is a distribution made during calendar year 2020 to an individual (or spouse) diagnosed with COVID-19 by a CDC-approved test, or to one who experiences adverse financial consequences as a result of quarantine, business closure, layoff, or reduced hours due to the coronavirus. In addition, any income attributable to an early withdrawal is subject to income tax over a 3-year period unless the individual elects to have it all included in their 2020 income. Finally, individuals may recontribute the withdrawn amounts back into an IRA or plan within 3 years without violating the 60- day rollover rule or annual contribution limits.
Retirement Plan Loans. Before the CARES Act, a participant could borrow from a retirement plan the lesser of 50% of the vested account balance or $50,000 (reduced by other outstanding loans). Beginning March 27, 2020 through 180 days thereafter, the maximum loan amount increases to the lesser of 100% of the vested account balance or $100,000 (reduced by other outstanding loans). In addition, participants who had outstanding loans as of March 27, 2020 may defer for one year any payments normally due from March 27 through December 31, 2020.
Charitable Contributions. Individuals who claim the standard deduction may also claim a new above-the-line deduction up to $300 for cash contributions made in 2020 to certain charities. Individuals who itemize deductions and make cash contributions in 2020 to certain charities may claim an itemized deduction up to 100% of AGI (increased from 60%). Eligible charities are those described in Section 170(b)(1)(A) of the Internal Revenue Code (for instance churches, educational organizations, and organizations providing medical or hospital care or research) and do not include donor advised funds or Section 509(a)(3) supporting organizations.
Student Loans. Payments (principal and interest) on federal student loans are suspended through September 30, 2020 without penalty. Interest will not accrue on these loans during this suspension period. In addition, from March 27 through December 31, 2020, an employer may contribute up to $5,250 annually toward an employee’s student loans, and such payment will be excluded from the employee’s income.
Unemployment Benefits. Unemployment benefits have been expanded to assist those who have lost their job during the current economic crisis. Because unemployment benefits are administered by the states (although each state follows the same guidelines established by federal law), check with your state program to determine eligibility requirements and how to file a claim.
Additionally, most states have provided their own relief such as a delay of the state income tax filing deadline or a temporary grace period for making mortgage payments.
Please note that this information is designed to provide accurate and authoritative information on the subjects covered. However, it isn’t intended to provide specific legal, tax, or financial advice. For specific professional assistance, please consult your attorney, accountant, or financial adviser.