![]() ![]() ![]() Adoption Credit. For 2020, the credit for an adoption of a child with special needs is $14,300, and the maximum credit allowed for other adoptions is the amount of qualified adoption expenses up to $14,300.Earned Income Tax Credit (EITC). For 2020, the maximum EITC amount available is $6,660 for married taxpayers filing jointly who have three or more qualifying children (it’s $538 for married taxpayer with no children).For more about the expanded CTC, click here. AGI phaseouts are not indexed for inflation and remain at $400,000 for married taxpayers filing jointly and more than $200,000 for all other taxpayers. The child tax credit has been expanded to $2,000 per qualifying child and is refundable up to $1,400, subject to phaseouts there is a temporary $500 nonrefundable credit for other qualifying dependents. Here's a look at a few of the most popular: Some additional tax credits and deductions have been adjusted for 2020. There are no Pease limitations in 2020.Job Expenses and Miscellaneous Deductions subject to 2% floor. Miscellaneous deductions, including unreimbursed employee expenses and tax preparation expenses, which exceed 2% of your AGI have been eliminated.For more on casualty losses after a disaster, click here. Casualty and Theft Losses. The deduction for personal casualty and theft losses has been repealed except for losses attributable to a federal disaster area.Charitable Donations. As a result of tax reform, the percentage limit for charitable cash donations to public charities increased from 50% to 60% in 2018 and will remain at 60% for 2o20.For more on mortgage interest under the TCJA, click here. Home Mortgage Interest. You may only deduct interest on acquisition indebtedness-your mortgage used to buy, build or improve your home-up to $750,000, or $375,000 for married taxpayers filing separately.State and Local Taxes. Deductions for state and local sales, income, and property taxes remain in place and are limited to a combined total of $10,000, or $5,000 for married taxpayers filing separately.Medical and Dental Expenses. The “floor” for medical and dental expenses is 7.5% in 2020, which means you can only deduct those expenses which exceed 7.5% of your AGI.No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.There are changes to itemized deductions found on Schedule A, including: Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.Ĭopyright © 1996 – 2024, Ernst & Young LLPĪll rights reserved. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. Kenneth Hausser ( Debera Salam ( Kristie Lowery ( Payroll News Flash.Workforce Tax Services - Employment Tax Advisory Services The 2020 annual percentage withholding tables for automated payroll systems are reproduced in the attachment.įor additional information concerning this Alert, please contact: The final 2020 Form W-4 will be released by the IRS later this month. These updated income tax withholding tables are designed to work with the extensive changes being made to the 2020 Form W-4. This table is used if the Form W-4 is from 2020 or later years and the box in step 2 of Form W-4 is checked. Form W-4, Step 2, Checkbox, Withholding Rate Schedules.This table is used if the employee's Form W-4 is from 2019 or earlier or if the box in step 2 of the Form W- and later years is not checked. Later this month, the IRS will publish the final Publication 15-T, Federal Income Tax Withholding Methods and Publication 15 (Circular E), Employer's Tax Guide.Īs explained in draft Publication 15-T, for 2020 and later years, there are two tables used to compute federal income tax withholding: The IRS has issued an early release of the 2020 annual percentage tables. ![]() IRS issues early release of the 2020 percentage method tables for automated payroll systems ![]()
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