COVID-19 Well-being

Money is very personal, and there is no one size fits all plan for everyone.  Every person/family has expenses, goals/priorities, and avenues of income that are individual to them.  Because money can only be spent once, every purchase or major financial decision impacts your bottom line.

As YOUR credit union, we are here to support you and encourage you to take an active role in your personal finances.  Communicating with your creditors, seeking expert advice, and formulating a plan that is realistic, workable, and takes an accurate account of your current income situation will make a huge impact on your financial success, during the current pandemic and beyond.

Economic impact payments(EIP) are a one-time payment to stimulate the economy and assist persons who may have lessened/no income during this time.  These funds are best used on bills, food, personal care items, paying down debt, or staring an emergency savings account; not on frivolous/nonessential items.

Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals, $2,400 for married couples and up to $500 for each qualifying child. Social Security & SSDI recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return.

Payments began April 10th, and will distribute automatically, with no action requited for most people. Payments will be direct deposited into the same banking account reflected on your 2019(18) return/on file with Social Security.  However, some taxpayers who typically do not file returns will need to submit a simple tax return to receive the EIP.   Taxpayers who did not direct deposit their refund, and received a paper check, will receive their EIP in the same format.  Mailed checks will begin going out around the first of May and will be sent to lower income earners first.

You are eligible for a full economic impact payment if you are a tax filer with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds.  Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.

For security reasons, the IRS plans to mail a letter about the economic impact payment to the taxpayer’s last known address within 15 days after the payment is paid.  The IRS will not call, text you, email you or contact you on social media asking for personal or bank account information – even related to the economic impact payments.

You can find more on Coronavirus Tax Relief and Economic Impact Payments on the IRS website.

Tax deadlines for 2020 have been extended to July 15th(Oct 15th for extended filers), but the earlier you file the earlier you will receive any potential refunds, including the CARE Act economic impact payment.

The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days.

Non-Filers –The IRS reminds people who have not filed their return for tax years before 2019 that they should file their delinquent returns. More than 1 million households that haven’t filed tax returns during the last three years are actually owed refunds; they still have time to claim these refunds. Many should consider contacting a tax professional to consider various available options since the time to receive such refunds is limited by statute. Once delinquent returns have been filed, taxpayers with a tax liability should consider taking the opportunity to resolve any outstanding liabilities by entering into an Installment Agreement or an Offer in Compromise with the IRS to obtain a “Fresh Start.” See IRS.gov  for further information.

Financial Institutions are considered “essential services”. Your funds are safe and personnel are here to serve you.  You may, however, need to make adjustments in how you access funds due to limited lobby access.

Take advantage of your financial institutions digital and self-service channels such as online banking, mobile apps, remote deposit, online bill pay, ATMs and night drops deposits.

Avoid Panic buying:
Take stock of your pantry and only purchase items you need.  This keeps your spending steady, reduces waste, and ensures supplies are available for others.

Avoid liquidation of retirement funds:
Retirement funds should only be withdrawn if  you have no other options.  As part of the CARES Act funds can be withdrawn from some qualified accounts without penalty(10%), but taxes would still need to be paid on the withdrawal, or the funds will need to be paid back to the account(payments can be made on the taxes or account repayment for up to 3 years).

Please contact a financial advisor and /or tax professional before withdrawing from your retirement account.

Be vigilant in protecting your personal information.   Unfortunately, fraudsters are taking advantage of this time to prey on those who may not normally use digital channels. You may receive an increase in calls, texts, or phishing emails requesting your personal information.  DO NOT provide it. Your financial institution will not ask you for your SSN, passwords or account information.  Be wary of fake social media ads, Amazon products, and assistance/charitable giving platforms. Make sure you are only transaction on known, secure sites.

Also, the IRS will not call, text you, email you or contact you on social media asking for personal or bank account information – even related to the economic impact payments.

More information on Coronavirus SCAMS can be found on the FTC website.

Not everyone has been financially affected by Coronavirus shut downs. Many are still at work and receiving their normal salary.  These individuals should continue making their payments as scheduled.

If you or a family member have been affected by loss of work or reduced income, don’t just stop making your payments.  Contact your creditors to make them aware of your hardship, and ask about payment options.  Most reputable institutions will be willing to work with you on loan extensions, skip- a-pay programs, or low interest personal loans to help you get by until you are back at work.

A reduced Fed rate does not always equal reduced mortgage rates. This may be a good time to refinance your home, but only if your current rate or term can actually be improved upon.  Also consider the length of time you plan to stay in your current home.  If you are not planning to stay in your current home for at least 5 to 7 years, the closing cost to refinance may outweigh any potential savings you would receive.

Most Financial Institutions are actively working with their customers. We encourage our members to call and discuss custom options to provide relief; including emergency loans, loan extensions, and modifications.  Members of our team are ready to provide you financial guidance and discuss any financial arrangements you may need to help you through this difficult and stressful time.