COVID tax questions

The Consolidated Appropriations Act (“CAA”) provided coronavirus relief as well as other tax related extensions that will affect your clients. Here are some highlights that relate to individuals.

  • Stimulus checks are back. The amount is $600 per taxpayer and $1,200 for married persons filing jointly along with $600 for each qualifying child. Income limits vary upon marital status.
  • Teachers and instructors who teach grades K-12 are allowed a $250/$500 (Single/MFJ) above the line deduction to allow for the purchase of personal protection equipment and disinfectant.
  • The above the line deduction for $300 of charitable gifts is extended into 2021.
  • There are two provisions related to your client’s health care expenses.
    • First, taxpayers that itemize their deduction may continue to expense unreimbursed health care expenses that exceed 7.5% of adjusted gross income.
    • Additionally, taxpayers that use a flexible spending account (FSA) as part of a cafeteria plan to reimburse medical care expenses may continue to carry over unused amounts in the FSA.
    • For taxpayers that have deducted tuition and related expenses as an above-the-line deduction should be aware that this is no longer an eligible deduction in 2021.

For more information, review the press release at