What you need to know
Crest Savings Bank’s is committed to helping our customers navigate through this challenging time. Over the last few weeks, we have worked closely with customers who have experienced direct financial losses as a result of the closure of non-essential businesses. Below are a few topics that may provide some light on the ever-changing environment we are all facing.
Economic Stimulus Checks Are Coming For Millions Of Americans
Millions of adults in the United States will automatically be receiving a payment of up to $1,200 as part of the federal economic relief plan to soften the blow from the coronavirus pandemic. The goal for delivery of the money is sometime in April.
Eligibility will be based on reported income from your 2019 tax return if you have already filed, or your 2018 return if you have not filed for 2019. To be eligible, you also must have a Social Security number.
The stimulus money will be directly deposited into your bank account if the IRS already has that information from your tax return, otherwise a check will be mailed to you. If you receive your check by mail, a fast way to get it into your account will be to use mobile deposit via your financial institution’s mobile banking app.
Here are some highlights of the plan:
- Individuals with annual adjusted gross incomes of $75,000 or less will receive $1,200.
- Married couples will get $2,400 if their income is under $150,000.
- Families will also get an extra $500 per child 16 and younger.
- The amounts people receive will be reduced on a sliding scale for individuals making up to $99,000 and married couples up to $198,000.
- Those who filed as heads of household and earn up to $112,500 a year will get $1,200 and $500 per child. The amount those adults receive will decline on a sliding scale to those earning up to $136,500.
- Those receiving Social Security benefits will receive the payments as long as their income does not exceed the limits. If you didn’t need to file a tax return, the information from form SSA-1099 will be used to send the money.
- For the millions of low-income citizens who aren't required to file a tax return, the IRS has added a button labeled ‘Non-Filers: Enter Payment Info Here' to its IRS.gov website. This link allows people to include their mailing address, information about a spouse or children, their Social Security numbers, and their financial account routing number so the money can be deposited directly. If they don't have an account, a check will be mailed to their address.
- In general, the stimulus checks will not be taxable, although there could be some exceptions.
The following information is from the IRS:
How much is it worth?
Eligible individuals with adjusted gross income up to $75,000 for single filers, $112,500 for head of household filers and $150,000 for married filing jointly are eligible for the full $1,200 for individuals and $2,400 married filing jointly. In addition, they are eligible for an additional $500 per qualifying child.
For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$112,500/$150,000 thresholds. Single filers with income exceeding $99,000, $136,500 for head of household filers and $198,000 for joint filers with no children are not eligible and will not receive payments.
Who is eligible?
U.S. residents will receive the Economic Impact Payment of $1,200 for individual or head of household filers, and $2,400 for married filing jointly if they are not a dependent of another taxpayer and have a work eligible Social Security number with adjusted gross income up to:
- $75,000 for individuals
- $112,500 for head of household filers and
- $150,000 for married couples filing joint returns
Taxpayers will receive a reduced payment if their AGI is between:
- $75,000 and $99,000 if their filing status was single or married filing separately
- 112,500 and $136,500 for head of household
- $150,000 and $198,000 if their filing status was married filing jointly
Eligible retirees and recipients of Social Security, Railroad Retirement, disability or veterans' benefits as well as taxpayers who do not make enough money to normally have to file a tax return will receive a payment. This also includes those who have no income, as well as those whose income comes entirely from certain benefit programs, such as Supplemental Security Income benefits.
Retirees who receive either Social Security retirement or Railroad Retirement benefits will also receive payments automatically.
Who is not eligible?
Although some filers, such as high-income filers, will not qualify for an Economic Impact Payment, most will.
Taxpayers likely won't qualify for an Economic Impact Payment if any of the following apply:
- Your adjusted gross income is greater than
- $99,000 if your filing status was single or married filing separately
- $136,500 for head of household
- $198,000 if your filing status was married filing jointly
- You can be claimed as a dependent on someone else’s return. For example, this would include a child, student or older dependent who can be claimed on a parent’s return.
- You do not have a valid Social Security number.
- You are a nonresident alien.
- You filed Form 1040-NR or Form 1040NR-EZ, Form 1040-PR or Form 1040-SS for 2019.
Do I need to take action?
- People who filed a tax return for 2019 or 2018
No additional action is needed by taxpayers who:
- have already filed their tax returns this year for 2019. The IRS will use this information to calculate the payment amount.
- haven’t filed yet for 2019 but filed a 2018 federal tax return. For these taxpayers the IRS will use their information from 2018 tax filings to make the Economic Impact Payment calculations.
- People who aren't typically required to file a tax return
Social Security and Railroad Retirement recipients who are not typically required to file a tax return need to take no action. The IRS will use the information on the Form SSA-1099 and Form RRB-1099 to generate Economic Impact Payments of $1,200 to these individuals even if they did not file tax returns in 2018 or 2019. Recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits. Social Security Disability Insurance (SSDI) recipients are also part of this group who don't need to take action.
For Social Security, Railroad retirees and SSDI who have qualifying children, they can take an additional step to receive $500 per qualifying child.
New feature from the IRS
If you don’t file taxes, use the "Non-Filers: Enter Your Payment Info Here" application to provide simple information so you can get your payment.
You should use this application if:
- You did not file a 2018 or 2019 federal income tax return because your gross income was under $12,200 ($24,400 for married couples). This includes people who had no income. Or
- You weren’t required to file a 2018 or 2019 federal income tax return for other reasons
If you receive these benefits, we already have your information and you will receive $1,200. Do not use this application if you receive:
- Social Security retirement, disability (SSDI), or survivor benefits
- Railroad Retirement and Survivor Benefits
Special note: People in these groups who have qualifying children under age 17 can use this application to claim the $500 payment per child.
Watch for an IRS letter
For security reasons, the IRS plans to mail a letter about the economic impact payment to the taxpayer’s last known address within 15 days after the payment is paid. The letter will provide information on how the payment was made and how to report any failure to receive the payment. If a taxpayer is unsure they’re receiving a legitimate letter, the IRS urges taxpayers to visit IRS.gov first to protect against scam artists.
Taxpayers Get Automatic Extension For Filing Federal Returns, Making Income Tax Payments
The Internal Revenue Service has given taxpayers a 3-month extension to file their 2019 federal income tax returns.
Due to the coronavirus pandemic, the new deadline is now July 15, 2020, for individuals, corporations and trusts, instead of the normal April 15 filing time. The extension is automatic, so you do not have to request it.
The tax payment extension applies to federal tax due with 2019 tax returns, plus 2020 first-quarter tax payments for an aggregate amount due of up to $1 million for individuals and trusts, and up to $10 million for C corporations. Any tax due in excess of these aggregate amounts is due on the normal due date and is not extended.
While this allows people additional time to file, the IRS recommends that anyone who expects a refund should file as soon as possible so they have the money to meet some of their immediate financial needs.
The fastest way to receive your refund would be via direct deposit into your checking account. If you choose to receive a check in the mail, consider using mobile deposit from your mobile banking app to put the money into your account as soon as you receive it.
The IRS says that if you can’t meet the July 15 filing deadline, you’ll still be able to request an extension. To do that, individual taxpayers will need to file Form 4868 and businesses would file Form 7004.
The IRS does not oversee state tax returns or payments and recommends that you check with your state tax agency to determine its filing and payment deadlines. To find your state revenue department search the internet using your state’s name and “income tax returns.”
If you have tax-related questions about filing returns, tax payments or extensions, visit the IRS at irs.gov or talk with your tax professional for more information.
Retirement Plan Changes Allowed To Help Deal With Coronavirus-Related Issues
As part of the federal stimulus package to help people struggling with the economic effects of the coronavirus crisis, Americans now have options to access up to $100,000 from their retirement accounts, as either a withdrawal or a loan.
The new rules apply to a range of people, including those who have lost a job or been furloughed because of the pandemic, those suffering from COVID-19, or who have a spouse or dependent with the virus.
Let’s take a look at how this affects you.
The changes for withdrawals from 401(k), IRA or similar employer-sponsored retirement accounts waive the normal 10% penalty on the amount of money withdrawn by people under age 59½, which will save $10,000 if you withdraw the full $100,000 limit. You’ll still have to pay income tax on the money you take out, but you can now spread that tax expense over three years and, if you repay the full amount of your withdrawal within three years, you can avoid paying those taxes.
Taking a loan from your 401(k) is another option, but you’ll have to repay that amount, with interest. You can now take out a loan for up to $100,000, or 100% of your vested amount, whichever is less. People with outstanding loans due between March 27 and Dec. 31, 2020, will get an extra year to repay it.
If you have you have questions about a withdrawal or loan from your retirement account, it is recommended that you talk to your retirement plan administrator.
Another benefit of these changes is that retirees who are 72 or older won’t have to take a required minimum distribution from their retirement account in 2020. With the drastic stock market fluctuations and retirement funds taking a hit, this gives invested money a chance to rebuild as the stock market recovers.
Individuals also have been given an extended amount of time to contribute to an IRA this year. Normally, the contribution deadline is the traditional April 15 tax-filing day, but that date has been pushed back to July 15 for 2020.
Should you withdraw money from your retirement account? That is up to you and your financial situation. Some experts recommend that you look at your retirement funds as a last resort. That’s because you’re depleting the funds you have set aside for the future and will be missing out on money you could be earning when the stock market starts to recover.
- Do I qualify for early withdrawals from retirement accounts?
In order to be eligible, participants must meet one of the following criteria:
• They have contracted COVID19 themselves
• Their spouse or dependent has contracted COVID19
• They have lost a job, been furloughed or otherwise suffered a heavy financial burden because of COVID19 (including loss of childcare)
- What if I already made an early withdrawal in 2020?
This waiver of the 10% penalty is retroactive to January 1, 2020, so if you had taken a distribution from your retirement plan earlier in the year that had been subject to the penalty it will now qualify for this waiver.
- Do I have to meet the required minimum distributions this year?
Required minimum distributions (RMDs) from IRAs, 401(k)s, 403(b)s and other retirement plans have been suspended for 2020. The waiver includes RMDs for those who reached age 70½ and who would be required to take their first RMD by April 1 of 2020. This waiver also includes RMDs from inherited IRAs for 2020.
- What if I’ve already taken the required minimum distributions for 2020?
One option is the 60-day rollover rule as applied to IRAs. If you took your 2020 RMD within the past 60 days, you could redeposit it into the IRA with no tax consequence. If more than 60 days have passed, your RMD must be met for 2020.
It's also important to note that the 60-day rule can only be used once within 12 months. Those who have taken their RMD from an inherited IRA will not be able to take advantage of this as it does not apply. The 60-day rule is complex, be sure to consult with your financial adviser, or with your IRA custodian to ensure you execute this type of transaction correctly.
Be On The Lookout For Coronavirus-Related Scams
With people nervous about the COVID-19 coronavirus, scammers already are swooping in to take advantage of those fears.
While it’s normal to want to learn more about the coronavirus and information surrounding it, experts are warning people to be cautious of scammers who are trying to infect your devices with malware, get personal information from you, or who are trying to get you to send them money for worthless or non-existent products. There have even been reports of crooks threatening people over late or missed payments.
According to the Federal Trade Commission and other experts, here are some of the scams to watch out for:
- Email phishing has already begun. Scammers are sending out emails claiming to be from the Centers for Disease Control or other health agencies, claiming to contain updates about the coronavirus. Consumers are being warned to be wary of these emails and not to click on any links or download any attachments unless they are absolutely sure of the source. Clicking on links or downloading attachments could install malware on your computer or take you to counterfeit sites where you might be asked to provide vital personal information.
- Some scammers claim to be selling products that can prevent the disease, treat it or maybe even make it go away. Don’t believe the claims. The FTC says there are currently no “vaccines, pills, potions, lotions, lozenges or other prescription or over-the-counter products available to treat or cure Coronavirus … online or in stores.” Don’t fall for these claims and don’t send any money. You’ll either be mailed a worthless product or receive nothing at all.
- As more people suffer financial hardship due to reduced hours or loss of jobs, scammers are likely to be contacting them threatening to disconnect vital services such as utilities or communications unless you pay them immediately. Legitimate businesses won’t threaten you, won’t demand payment in cash, gift cards or wire transfers, and they won’t ask for financial account numbers, your Social Security number, or account passwords.
Some people are even posing as charities, hoping to rely on the kindness of others to steal your money.
To guard against these scams, experts say to:
- Delete unsolicited email and to not click on links in them or download files.
- Don’t fall for online claims of remedies or vaccinations.
- Don’t react to threats by making payments with gift cards or wires.
- If you have any concern that an email or call could be legitimate, type in a company’s official website address by hand or call an official number listed on a bill, statement or payment card. Tell they why you are contacting them.
- Get information only from trusted sites, such as the Centers for Disease Control at cdc.gov, the World Health Organization at who.int or from trusted news sources.
While it’s natural to want to learn more about the coronavirus pandemic and to do what you can to protect yourself and others, it’s important to be cautious in order to protect yourself from scammers.
Health Advice And Banking Tools To Help During The Coronavirus Pandemic
The worldwide spread of the COVID-19 coronavirus has prompted health officials to strongly advise us all to minimize our exposure to possible infection.
These advisories range from avoiding large gatherings to simple steps we can take to protect ourselves and others on a daily basis, such as how we go about our normal activities and how we meet our financial needs.
Important general health steps from the Centers for Disease Control include:
- Avoid public areas and large gatherings.
- Wash your hands frequently with soap and water for at least 20 seconds or use a hand sanitizer with at least 60% alcohol.
- Avoid touching your eyes, nose and mouth with unwashed hands.
- Cover your nose and mouth with a tissue when you cough or sneeze.
- Regularly clean and disinfect high-touch surfaces.
- Stay at home if you are ill and call your medical provider for advice about testing or treatment.
When it comes to meeting many of your money needs, our financial institution offers a variety of digital services through online and mobile banking. These steps can reduce your visits to a branch and the need to handle money or checks when out of your home.
Online, mobile and other banking services include:
- Online banking to manage your accounts, transfer funds, monitor transactions and more.
- A free mobile banking app that can be downloaded for use on your smartphone or tablet.
- Mobile deposit from the app so you can deposit paper checks from anywhere at any time.
- Paying bills with online bill pay.
- Using person-to-person services such as Zelle to send money to family or friends.
- Using your debit or credit card for payments instead of cash.
- ATMs so you can get cash if necessary and to complete other banking needs including deposits.
- Using a drive-thru at branches to promote social distancing.
- Merchant Remote Deposit Capture for depositing business checks from your office.
The steps you take to protect yourself and others both at home and in public can minimize your exposure to COVID-19.
Resources For Information About Coronavirus Relief, Benefits, And More
As the federal government continues to respond to the coronavirus crisis, everything from stimulus and benefit packages for individuals and businesses to health information and advice have been changing rapidly – sometimes day to day.
The same goes for responses on a more local basis, whether it’s your financial institution, state or city governments, or even the places you shop or eat.
With an internet connection and a computer, smartphone or tablet, there are numerous official sites where you can find the latest information that can help you economically and physically.
For the latest on the federal economic stimulus plan regarding payments of up to $1,200 for individuals and $500 for children, visit the Internal Revenue Service at irs.gov, or the U.S. Treasury Department at treasury.gov.
Many small businesses have been especially hard hit. Owners can visit sba.gov for details on two important plans. One is the Paycheck Protection Program and its potentially fully forgivable loan for businesses that retain or quickly rehire employees. The other is the Economic Injury Disaster Loan, which includes an advance that will not have to be repaid. Crest Savings is participating in the Paycheck Protection Program for details visit our SBA-PPP Page.
Workers who have lost their jobs due to business closures or staff cutbacks should visit their state’s labor or economic security department to file for jobless benefits. To find your state’s website and to apply online, search by your state’s name and the words ‘unemployment benefits.’
In addition to federal guidelines regarding the coronavirus, many state and city governments have issued their own directives for businesses and the public. Visit those sites to learn more.
A lot of businesses have had to either change their hours, change their product offerings, or temporarily close their doors. Find their websites or telephone numbers on the web for details -and find ways to support them if you are able.
The coronavirus fallout has also caused a wide range of financial hardships, from paying loans, to covering your bills. Many businesses are making accommodations to help you. If you’re facing financial hardships, you should contact each of your creditors to discuss your situation.
Most financial institutions have modified their hours or limited lobby access. Online and mobile banking gives you access to many services 24 hours a day. You can make loan and bill payments, transfer money, make mobile deposits, and monitor transactions online or from your mobile banking app. Visit your financial institution’s website or contact their customer service department if you have questions.
Avoiding the coronavirus or seeking medical advice are major concerns for everyone. For a wide range of health advice for individuals and businesses, visit the Centers for Disease Control at cdc.gov.
These are tough and confusing times but there are many things happening to address your financial and physical health. Take the time to learn how you can get help.
This information is based on currently available information and is subject to change. We are committed to keeping you informed as we receive additional guidance.