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2020 Tax Update Highlights Here are some key highlights from the tax law changes that have occurred this year: Recovery Rebate Credit Taxpayers who did not receive an Economic Impact Payment that they were eligible for in 2020 or did not receive the full amount of the payment they were eligible for, can claim the Recovery Rebate Credit on this year's return. Payments were $1,200 for single filers, $2,400 for married filing joint, and $500 per qualifying child. Charitable Donations Under the CARES Act, the 60%-of-AGI limitation is lifted for cash donations for taxpayers who itemize. This means that they can elect to deduct up to 100% of their 2020 AGI (donations to donor-advised funds and private, nonoperating foundations do not qualify). Taxpayers who take the standard deduction will be able to take a new “above-the-line” deduction for $300 of cash donations. Retirement Plan Withdrawal Penalties Waived Taxpayers affected by COVID-19 may withdraw up to $100,000 from IR As, workplace retirement plans such as 401(k)s and 403(b)s, and personal retirement accounts and will not be subjected to the 10% early withdrawal penalty. Distributions are taxable, but those taxes can be spread over three years. Additionally, now taxpayers can withdraw up to $5,000 per spouse for birth or adoption-related expenses without incurring the early withdrawal penalty Let us know if you need any help preparing your 2020 tax returns!