In response to the devastating toll that the COVID-19 pandemic is having on Americans, the government signed a $2 trillion relief package to provide financial assistance to those affected by the coronavirus. In addition to stimulus payments, The CARES Act (Coronavirus Aid, Relief and Economic Security Act) provides additional unemployment coverage, student loan modifications, and retirement account changes. However, many Americans are, understandably, unclear about the details of the relief package and how it may impact their taxes and estate. Colorado individuals who have questions and concerns about how the CARES Act and stimulus payments may affect their estate planning should contact an attorney to discuss their rights and remedies. The recent stimulus payment may be a good opportunity to start or add to a Colorado estate plan.
Generally, individuals and married couples who filed a 2018 or 2019 income tax return are eligible for a payment as long as they have a social security number. Individuals who had an income level exemption from filing a tax return but receive Supplemental Security Income (SSI), Social Security Retirement and Disability benefits, or Disabled Adult Child benefits, are also eligible. Those who are claimed on someone else’s tax return as a dependent are not eligible for a payment
The payments are $1200 for individuals and $2400 for couples who filed jointly with an income equal to or less than $75,000 for individuals, $112,500 for head of household filers, and $150,00 for married couples filing jointly. Additionally, these parties may receive an additional $500 for each dependent child under 17 years old. Other qualifications and reductions are depending on income. These benefits are not taxable and do not affect a person’s public benefit amount. However, those who are not typically required to file a tax return, including some recipients of public assistance, may need to take action to obtain their payment in a timely manner.
The Internal Revenue Service (IRS) was and continues to be under immense strain to quickly and efficiently disperse funds to qualifying Americans. This pressure led to glitches and some mistakes in the process. One major issue was that the IRS inadvertently sent out stimulus checks to deceased individuals. Although a deceased individual’s estate is not entitled to economic stimulus payments, the IRS failed to include these parties in their list of excluded individuals, leading to additional confusion. These payments typically occurred in instances where a couple filed their 2018 or 2019 taxes jointly, but one spouse has since passed away. The agency is supposed to check death records; however, not all of the records are up-to-date.
As a result of these inadvertent checks, families are concerned about whether they have to return these payments. Currently, the IRS advised families that they do not expect people to return the money, but there is conflicting information from President Trump. The Government Accountability Office (GAO) is investigating the situation and advising people to hold onto the funds until they provide further guidance.
Contact a Boulder Estate Planning Lawyer
If you or someone you know has estate planning questions or concerns, contact the attorneys at the Braverman Law Group, LLC. The attorneys at our law firm are dedicated to providing clients with comprehensive Colorado estate plan advice and clear explanations of any relevant changes to Colorado laws. We maintain an active practice representing clients in their estate planning, special needs planning, gun trusts, and asset protection matters. Our attorneys understand the challenges that many families are facing during the current COVID-19 pandemic, and we are here to provide accurate information and guidance during this difficult time. Contact our office at 303-800-1588 to discuss your legal matter with an attorney at our law firm.