By a variety of measures, 2020 has been a tough year for many Americans. That is why it’s important to take a step back and consider what legislative changes and new administrative rules have been implemented to make this year a little easier. As you navigate this new landscape, you should utilize a personal financial strategist in West Palm Beach for guidance in your investment decisions and future retirement income strategy.
If you received a stimulus check last spring to help cope with the financial effects of the COVID-19 virus on your household, there’s something you should know. Those funds are technically an advance rebate of a special 2020 tax credit. Many taxpayers will be able to reconcile that rebate on their 2020 return to equal the tax credit allowed. However, there will be some for whom credits exceed their rebates and they can claim the balance as a refund, and others for whom their rebate exceeds their credits — although tax professionals and personal financial strategists in West Palm Beach do not believe those payments will have to be repaid.1
According to a Care.com survey of parents with children younger than age 15, nearly three-quarters report that they intend to make major changes in their careers to accommodate the potential need for childcare this year. 2 Among them, 15% indicate they may leave the workforce altogether. As you plan, be aware that you may be eligible for paid leave to care for your children through a provision included in the Families First Coronavirus Response Act (FFCRA).
Passed in March, this provision grants up two weeks (80 hours) of emergency paid sick leave at two-thirds pay (capped at $200 per day) for parents unable to work because of a need to care for a child under the age of 18 if their school or care provider is closed or unavailable due to the pandemic. If schools open with an intermittent schedule, parents may be able to take paid leave only on the days their children are at home.3
In light of the number of people who need to need to stay home because they are either sick, quarantined for possible exposure to COVID-19, or at high risk if they do contract the virus, the Centers for Medicare and Medicaid Services has relaxed rules regarding in-home care and medical services.
Specifically, nurse practitioners, clinical nurse specialists, and physician assistants can now provide home health services for Medicare and Medicaid beneficiaries — previously unavailable unless certified by a physician. They can now order, establish, and review a plan of care and certify eligibility for home health services.4 Be sure to ask your personal financial strategist in West Palm Beach about how this can fit in your financial pp
If you’re a business owner and planning for your own care needs in retirement, be aware that Sub-Chapter C Corporations can deduct long-term care (LTC) insurance premiums on behalf of employees, business owner spouses, or dependents. Self–employed workers also may deduct 100% of LTC premiums up to certain age-based limits.5 Unfortunately, individual tax filers may deduct LTC premiums only if they itemize tax deductions and only to the extent those premiums exceed 7.5% of their adjusted gross income.6 Note that some states allow for limited deductions on state tax returns.7
Given the national controversy on immigration rules, one lesser-known change made this year is that the federal government has actually loosened restrictions for certain visas. Effective May 14, 2020, through May 15, 2023, the Department of Homeland Security has removed certain limitations for employers to hire H-2B workers already residing in the U.S. to provide temporary labor or services essential to the food supply chain. This was in response to disruptions caused by the COVD-19 pandemic.8
As for rule changes that affect the country’s financial health, the Federal Reserve announced in March that large banks have held up well in light of the strain caused by the recent economic decline. Moving forward, the central bank has mandated that large banks suspend share repurchases, cap dividend payments, and limit dividends to help preserve capital during the third quarter of 2020.9
Rules, regulations, and federal laws are always shifting. To protect your financial future, your strategies need to be able to adapt to the constantly changing environment. At Legacy Financial Partners, we can offer sound advice and thoughtful guidance to help you navigate changes in fiscal regulation. Schedule a meeting today to learn about what we can do for you!
Content prepared by Kara Stefan Communications.
1 Joy Taylor and Rocky Mengle. Kiplinger. June 22, 2020. “Tax Changes and Key Amounts for the 2020 Tax Year.” https://www.kiplinger.com/slideshow/taxes/t055-s011-tax-changes-and-key-tax-amounts-for-2020/index.html. Sept. 8, 2020.
2 Jennifer Liu. CNBC. Aug. 17, 2020. “Parents may qualify for paid leave, unemployment if schools are closed for the fall.” https://www.cnbc.com/2020/08/17/parents-may-qualify-for-paid-leave-unemployment-due-to-school-closure.html. Accessed Sept. 8, 2020.
4 Center for Medicare & Medicaid Services. April 30, 2020. “Trump Administration Issues Second Round of Sweeping Changes to Support U.S. Healthcare System During COVID-19 Pandemic.” https://www.cms.gov/newsroom/press-releases/trump-administration-issues-second-round-sweeping-changes-support-us-healthcare-system-during-covid. Accessed Sept. 8, 2020.
5 LTC Partner. 2020. “2020 Long Term Care Insurance Tax Deduction.” https://www.longtermcareinsurancepartner.com/long-term-care-insurance/2020-long-term-care-insurance-tax-deduction. Accessed Sept. 8, 2020.
6 Internal Revenue Service. Sept. 20, 2020. “Topic No. 502 Medical and Dental Expenses.” https://www.irs.gov/taxtopics/tc502. Accessed Sept. 21, 2020.
7 LTC Partner. 2020. “2020 Long Term Care Insurance Tax Deduction.” https://www.longtermcareinsurancepartner.com/long-term-care-insurance/2020-long-term-care-insurance-tax-deduction. Accessed Sept. 8, 2020.
8 Federal Register. May 14, 2020. “Temporary Changes to Requirements Affecting H-2B Nonimmigrants Due to the COVID-19 National Emergency.” https://www.federalregister.gov/documents/2020/05/14/2020-10486/temporary-changes-to-requirements-affecting-h-2b-nonimmigrants-due-to-the-covid-19-national. Accessed Sept. 8, 2020.
9 Federal Reserve. June 25, 2020. “Federal Reserve Board releases results of stress tests for 2020 and additional sensitivity analyses conducted in light of the coronavirus event.” https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200625c.htm. Accessed Sept. 8, 2020.
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