CARES Act and What's in it for me?
What’s inside the $2 trillion CARES Act? What’s in it for me?
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is designed to provide relief for individuals and businesses who have been hurt by the outbreak. I won’t try to include all 800+ pages in this email, but here are a few key provisions that you should know about:(1)
One-time cash payment. Taxpayers are eligible for a one-time direct deposit of up to $1,200 per adult ($2,400 per couple) plus $500 per child under age 16. Amounts are reduced for those who make more than $75,000 ($150,000 if married). If you have filed your 2019 taxes already, the IRS will use that income to calculate your payment; if not, they’ll use your 2018 tax filing.
Small business relief programs. One of which is the ability to apply for an Economic Injury Disaster Loan advance of up to $10,000. From the linked SBA website -- "Funds will be made available within three days of a successful application and this loan advance will not have to be repaid." -- https://www.sba.gov/page/disaster-loan-applications
Better unemployment benefits. The Act will extend and expand unemployment insurance through Dec. 31. Eligible workers (now including self-employed, independent contractors, and gig economy workers) will receive an extra $600/week for four months, on top of what they receive from state unemployment benefits.
Early withdrawal penalty waiver. The Act waives the standard 10% early withdrawal penalty for eligible coronavirus-related distributions from retirement accounts (retroactive to Jan. 1). Income taxes on withdrawals will still be owed.
2020 RMDs suspended. Required Minimum Distribution from an IRA or 401(k) this year will not have to be taken, leaving people in control of how much they withdraw.
Charitable contributions tax-deduction. Up to $300 of cash contributions to charities are now tax deductible without having to itemize your deductions. This applies in 2020 and all years going forward.
Financial advice is a public service in these times; you're welcome to share this with a friend.
Eric Maldonado, CFP®, MBA
Aquila Wealth Advisors
AquilaWealth.com
1https://www.fidelity.com/learning-center/personal-finance/coronavirus-stimulus-package
https://www.washingtonpost.com/business/2020/03/30/coronavirus-stimulus-cares-act/
https://www.cnbc.com/2020/03/26/coronavirus-relief-act-expanded-unemployment-payment-and-eligibility.html
Chart source: https://www.npr.org/2020/03/26/821457551/whats-inside-the-senate-s-2-trillion-coronavirus-aid-package
Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results. Consult your financial professional before making any investment decision. For illustrative use only.
