$2 Trillion Stimulus Package Passed

President Trump signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law late in March. Some financial analysts believe the billions it provides in corporate assistance and checks to individuals increase the odds of a U-shaped recession. These commentators say the economy could go into a sharp recession in the second quarter but rebound quite sharply in the second half of the year – provided the U.S. is able to effectively contain the virus.[1]

CARES funding to businesses, healthcare and government includes: 

  • $500 billion in loans, loan guarantees and investments to corporations.
  • $350 billion to small businesses designed to prevent layoffs and closures.
  • $140 billion to support hospitals, provide medical equipment and supplies and increase the healthcare workforce.
  • $150 billion to states and local governments for disaster relief, transit programs and education.
  • $250 billion for unemployment insurance – expanding eligibility and adding an extra $600 a week to states’ unemployment benefits for up to four months. The deal includes self-employed contractors.


CARES policies directly affecting individuals include: 

  • Individual tax filers with adjusted gross income up to $75,000 and married couples filing joint returns with income up to $150,000 in 2019 (or in 2018 if they haven’t filed for 2019) will automatically receive $1,200 and $2,400 respectively.
  • Individuals and couples whose income is over those limits but up to $99,000 and $198,000 will receive reduced amounts.
  • Parents will receive $500 for each qualifying child.
  • Required Minimum Distributions from IRAs and 401(k)s are suspended through 2020. 401(k) loan limits are increased from $50,000 to $100,000.
  • Penalties are waived on early withdrawals from pretax retirement plans up to $100,000 for coronavirus-related needs in 2020. Such withdrawals will be taxed, but taxes will be spread over three years. Alternately, individuals may replace the funds within three years.
  • Federal student loan and interest payments are automatically deferred until Sept. 30. For individuals who qualify for student loan forgiveness, these skipped payments will count toward their 120 required payments.

If you have questions on how the CARES Act affects you personally or other concerns about our current situation, don’t hesitate to call.

 Securities America and its financial service professionals do not provide tax advice.

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[1] https://www.thinkadvisor.com/2020/03/30/greg-valliere-turning-point-in-coronavirus-crisis-is-near/?kw=Greg%20Valliere:%20Turning%20Point%20in%20Coronavirus%20Crisis%20Is%20Near&utm_source=email&utm_medium=enl&utm_campaign=dailywire_2storytemplate&utm_content=20200330&utm_term=tadv

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* Source: Pew Research Center
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