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March 31, 2020 | COVID-19

The CARES (Coronavirus Aid, Relief, and Economic Security) Act
There is and will continue to be a lot of information available about the details of this 800+ page bill that was signed into law on March 27th. As your trusted team, we are analyzing how any relief items in the bill may apply to our individual clients and their financial planning moving forward. Here is a quick list of the most asked topics so far. Consult your advisor to learn more.

Individual Recovery Payments
The eligibility for and amount of payments being given to individuals is based on Adjusted Gross Income (AGI) reported on the latest tax return on file with the IRS – 2019 if that return has been filed, if not your 2018 AGI will be used. The one-time payments will be given based on the following thresholds: Married Filing Joint: $150,000; Head of Household: $112,500; All Other Filers: $75,000.

Required Minimum Distributions Waived
For 2020, all RMDs are suspended, including those for inherited IRAs as well as traditional IRAs of those over age 70½. For RMDs already taken in 2020, you have up to 60 days to return a distribution to an IRA or deposit it in another qualified retirement account.

Penalty for Early Retirement Distributions Waived
The 10% penalty for taking early distributions from qualified retirement plans, including IRAs and 401(k)s, is waived. The waiver applies to distributions taken between January 1, 2020 and December 31, 2020. Up to $100,000 of distributions can avoid the penalty.

Retirement Plan Loan Rules Modified
For those impacted by coronavirus allowed loan amounts are doubled to $100,000. The modifications include an increase to allow use of up to 100% of the vested balance, and loan payment may be deferred up to one year.

For individuals with Federal student loans, payments may be deferred until September 30, 2020. For small businesses, including self-employed, the CARES Act includes payroll tax deferrals in addition other available credits, loans and assistance.

Here are some of our top picks for articles to help you understand the basics of the CARES Act.

FORBES – The CARES Act Has Passed: Here Are The Highlights

NPR – What’s Inside The Senate’s $2 Trillion Coronavirus Aid Package
READ: $2 Trillion Coronavirus Relief Bill
(includes a searchable widget of the entire bill)

INDUSTRY BLOG (Michael Kitces.com) –
Analyzing the CARES Act: From Rebate Checks To Small Business Relief For The Coronavirus Pandemic