Coronavirus Individuals CARES Act

Coronavirus Individuals CARES Act

In these unprecedented times the Federal Government has passed into law the Coronavirus, Aid, Relief and Economic Security (CARES) Act.  Below is a summary of individual benefits your family might receive.

1. No Required Minimum Distributions for Calendar Year 2020
   1. You have 60 days to roll RMD’s already taken back into qualified plans or IRA’s.
2. Inherited accounts get 1 year extension from 10 yr to 11 yr max withdrawal period. For Trusts it moves from 5 years to 6 years.
3. Stimulus checks:
   1. Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment.
      1. 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.
   2. Eligible taxpayers who filed tax returns for either 2019 or 2018 will receive a check of $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child.
4. Unemployment assistance
   1. This Bill adds $600 per week from the federal government on top of whatever base amount workers receive.
   2. Example; a Worker collecting 340 per week from the state, under the new federal program would get $940 for up to 4 Months
5. Hardships Distributions within 180 days of 3/27/2020
   1. 3 qualification criteria:
      1. You have COVID-19, your spouse/dependent has it, or you cannot gain employment/are laid off because of COVID-19
      2. Additional qualification: If you are in a FEMA zone you qualify
   2. No 10% penalty
   3. No mandatory 20% federal tax withholding
      1. Can pay taxes over 3 years or deposit back into 401k/IRA over 3 years and pay no tax
6.  401k plan Loans have increased up to $100,000, or 100% of account value. Existing loans payments can be frozen for one year–interest still accrues
   1.  valid 3/27/2020-9/27/2020
7.  Federal student loan programs allow a deferral of interest and principal through September 30, 2020.
8.  IRA and HSA funding deadlines now 7/15/2020
9.  HSAs can be used for COVID-19 testing
10. Telehealth: The bill reauthorized the telehealth programs to extend the reach of virtual doctors.

If you have additional questions or would like to have an individual consultation on how you can best utilize these benefits for you and your family please reach out to one of our Advisors at 330-659-7140 or kjparker@hfswa.com to schedule time.

Written by:  Justin Hamlin, CFP ® Associate Client Advisor/Todd Rohrer, Client Advisor

sources:

http://www.phillipsorg.com/payroll-protection-program-ppp-

Congress.gov/Bill/116th-Congress/senate-Bill/3548

https://www.napa-net.org/coronavirus-aid-relief-and-economic-security-cares-act-faqs,https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/how-the-cares-act-changes-health-retirement-and-student-loan-benefits.aspx, https://ferenczylaw.com/flashpoint-coronavirus-relief-from-congress-the-cares-act/?,

https://www.irs.gov/coronavirus

These are the opinions of Justin Hamlin and Todd Rohrer and not necessarily those of Cambridge, are for information purposes only, and should not be construed or acted upon as individualized investment advice.  Investing involves risk.  Depending on the types of investments, there may be varying degrees of risk.  Investors should be prepared to bear loss, including total loss of principal.  The strategies discussed herein are not designed based on the individual needs of any one specific client or investor.  In other words, it is not a customized strategy designed on the specific financial circumstances of the client.  However, prior to opening an account, Cambridge will consult with you to determine if your financial objectives are appropriate for investing in the model.  You are also provided the opportunity to place reasonable restrictions on the securities held in your account.