09 Apr 10 KEY PROVISIONS OF CORONAVIRUS LEGISLATION THAT AFFECT SENIORS
Although we are all affected by the pandemic, the following are just some of the key provisions that impact seniors:
- Rebates. All U.S. residents with adjusted gross annual income of up to $75,000 ($150,000 if married) who are not a dependent and have a work eligible social security number are eligible for a $1,200 ($2,400 if married) rebate. The IRS will use either the taxpayer’s 2019 return if filed, and if not, their 2018 return. The rebate is reduced by $5 for each $100 that a taxpayer’s income exceeds the limits mentioned above. The amount is phased out for single filers with income exceeding $99,000, $146,500 for head of household filers with one child and $198,000 for joint filers with no children. The rebate will not jeopardize those receiving Medicaid. Adult dependents are not entitled to any rebate.
- Waiver of Required Minimum Distribution Rules. If an individual turned 70½ before January 1, 2020, then normally a required minimum distribution (RMD) is required if you have a traditional IRA or certain defined contribution plans. When this occurs, the individual is taxed on the income. The RMD is waived for year 2020. If a RMD has been taxed but 60 days have not elapsed since the date of distribution, it can be redeposited into the IRA.
- Charitable Contributions Encouraged. As a result of the tax law changes a few years ago, a taxpayer is no longer able to take a charitable deduction unless you have enough deductions to itemize. Under the coronavirus relief package, Americans can deduct up to $300 for a charitable contribution even if you don’t itemize. Furthermore, if you do itemize, the limitation of 50% of adjusted gross income is suspended for year 2020.
- Extension of Spousal Impoverishment Protection. There are Medicaid programs in various states (including Texas) where the state helps pay for caregiving at home. Medicaid eligibility is based on the amount of countable resources of a married couple. Presently the maximum limit, if not expanded is $128,640. However, to encourage continued marriage so that the well-spouse doesn’t deplete much of his or her resources that the well-spouse can live on with less fear of depletion, the government permits the well-spouse to keep a much higher (>$128,640) resource amount that could be protected with the government still paying for part or all of the caregiving costs and drugs of the ill-spouse. This program has been extended until at least through November 30, 2020.
- Over-the-Counter Medical Products without Prescriptions. Previously Health Savings Accounts (HSA) and Flexible Savings accounts were used for doctor bills or prescriptions. Now such accounts can be used even without a prescription.
- Health Savings Accounts for Telehealth Services. The law now allows a high-deductible health plan with a HSA to cover telehealth services prior to a patient reaching the deductible, increasing access for patients who may have the COVID-19 virus and protecting other patients from potential exposure.
- Expanding Medicare Telehealth. Medicare beneficiaries can now have access to telehealth, without the previous limitations, from a broad range of providers. This would include remote patient monitoring for home health services.
- Allowing up to Three Months Fills and Refills of Covered Medicare Part D. The law now requires that Medicare Part D plans provide up to a 90-day supply of a prescription medication if required by a beneficiary during the pandemic. Many plans already permit this.
- Foreclosure Moratorium. Federally backed mortgages (Fannie Mae and Freddie Mac, insured by HUD, VA, or USDA) cannot be foreclosed upon for a period of 60 days beginning on March 18, 2020.
- Temporary Moratorium on Eviction Filings. Landlords are prohibited from initiating legal action to recover possession of a rental unit or to charge fees, penalties or other charges to the tenant related to non-payment of rent where the landlord’s mortgage on the property is insured, protected or assisted in any way by HUD, Fannie Mae, Freddie Mac, etc.
There are numerous other provisions in the new law to keep Americans safe and reduce the risk of financial devastation.
If interested in learning more, consider attending our next free “Estate Planning Essentials” virtual workshop (on April 18, 2020) by calling us at (214) 720-0102 or sign up by clicking here. Our goal is to make it easy for you to attend from the comfort of wherever you reside.