The Coronavirus Aid, Relief and Economic Security (CARES) Act is an estimated $2 trillion federal relief package designed to combat the harmful economic effects of the COVID-19 pandemic. The law looks to provide cash infusions to individuals, businesses, health care organizations and state/local governments through payments, loans and tax credits.

Taxes and payments: Individual tax filers who had an adjusted gross income up to $75,000 and married couples who filed joint returns with income up to $150,000 will automatically receive $1,200 and $2,400 checks respectively. Individuals and couples whose income was over those limits but up to $99,000 and $198,000 respectively will receive reduced amounts. Parents will receive $500 for each qualifying child. Individuals now have until July 15 to file their 2019 federal income taxes. Taxpayers can claim up to a $300 deduction for charitable donations made in 2020 – even if they don’t itemize.

 Retirement accounts: 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. Alternatively, individuals may replace the funds within three years. 

Student loans: Federal student loan and interest payments are automatically deferred until September 30. For individuals who qualify for student loan forgiveness, these skipped payments will count toward their 120 required payments.

Unemployment: Eligibility for unemployment insurance is expanded to include self-employed contractors and gig workers. Unemployment filers will receive an extra $600 a week (in addition to their states’ unemployment benefits) for up to four months. It also adds 13 weeks of unemployment benefits.

Homeowners and renters: Holders of federally backed mortgages can request forbearance for up to 180 days for virus-related hardships, with a second extension. Landlords with mortgages backed by the U.S. Department of Housing and Urban Development, Fannie Mae, Freddie Mac and other federal entities cannot pursue eviction of tenants for 120 days following the Act’s enactment.

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.

Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Mission Point Planning Group and Securities America are separate companies.

 

Securities offered through Securities America, Inc. Member FINRA/SIPC. Check the background of your financial professional at FINRA's BrokerCheck. Advisory services offered through Securities America Advisors, Inc. Mission Point Planning and Retirement, and the Securities America Companies are unaffiliated.
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The Five Star Wealth Manager award, administered by Crescendo Business Services, LLC (dba Five Star Professional), is based on the following objective criteria: Credentialed as an investment advisory representative (IAR) or a registered investment adviser; Actively employed as a credentialed professional in the financial services industry for a minimum of five years; Favorable regulatory and complain history review; Fulfilled their firm review based on internal firm standards; Accepting new clients; One-year client retention rate; Five-year client retention rate; Non-institutionalized discretionary and/or non-discretionary client assets administered; Number of client households served; Educational and professional designations. Wealth managers do not pay a fee to be considered of awarded.


* Source: Pew Research Center
† Source: “Quantitative Analysis of Investor Behavior, 2014” Dalbar Inc. Most recent data available. An index is un-managed and one cannot invest directly into an index.

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