Coronavirus Economic Booster Shot

Daniel M. Kelly, CFP®, CEBS, ChFC®, CLU®

The Consolidated Appropriations Act was signed into law on December 27, 2020. This $900 billion coronavirus aid package provides another round of economic stimulus for those in need.    Some of the highlights include: 

Medical:  The 7.5% of adjusted gross income (AGI) limit pertaining to the medical expense deduction (listed on Schedule A, "Itemized Deductions") has been made permanent. The 10% of AGI limit no longer applies.

Charitable:  Charitable cash contributions listed on Schedule A  allow up to 100% of AGI (not 60% AGI limitation) for 2020 and 2021.  This is allowed when you choose to itemize and make cash contribution to a charity (including public and private charities, but not to a donor-advised fund or a 509(a)(3) supporting organization). 

Charitable deduction for non-itemizers (persons electing to use the standard deduction instead of itemizing) in 2021 may choose to deducted up to $600 for married couples filing a joint return. For non-married filers or married filers who file separately the limit is reduced to $300.

Required minimum distributions (RMD):  While RMD payments were not required in the year 2020, they are required in  2021.  

Student Loans: College students and parents with federal student loans will receive an additional extension on federal student loan payments and will not be required to make payments on Federal Student loans until April 1, 2021. This includes both principal and interest payments.

Unemployment and Renters Assistance:

Federal unemployment benefits assistance of $300 per week is available for all workers receiving unemployment benefits, through March 14, 2021.

Emergency Rental Assistance extends the existing CDC eviction moratorium through January 31, 2021. This establishes a federal emergency rental assistance program, with $25 billion in funds to be distributed by state and local governments. Eligible households may receive up to 12 months of assistance, plus an additional 3 months, if necessary, to ensure housing stability. Funds may be used for rent and past due rent, as well as to pay utility  bills and certain other expenses related to housing incurred due to COVID-19.

Direct Stimulus Payments: 

One-time payment up to $600 to individual tax filers with adjusted gross income (AGI)  up to $75,000 annually, and up to $1,200 for married filing jointly with AGI  up to $150,000 annually. These taxpayers will receive $600 for each dependent child under age 17.

Dan Kelly, CFP®, CEBS, ChFC®, CLU® is a lead advisor at FAI Wealth Management.  If you are interested in learning more about our Investment and Financial Planning services, please contact our office at (410) 715-9200 or dkelly@faiweatlh.com. We look forward to speaking with you and answering your questions.

By Daniel M. Kelly, CFP®, CEBS, ChFC®, CLU®
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