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What the CARES Act Means to You

Updated: Apr 19

The CARES Act was recently passed as a means of providing relief from the economic impacts of Coronavirus. Below, our experienced financial advisors and financial planners have put together a short list to help you better understand what this stimulus entails.

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Highlights of the CARES Act:

Last week, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion emergency fiscal stimulus package to speed relief across the American economy, to keep businesses and individuals afloat during this unprecedented time in American life. Larry Kudlow, White House Economic Advisor, noted that the combination of the stimulus and the Federal Reserve actions will amount to a $6 trillion injection into the economy, approximately 30% of annual gross domestic product (GDP). We wanted to summarize some of the highlights of the CARES Act in an effort to keep you well informed during this period. There very well could be more government action as we move forward and we will try to keep you apprised as things happen. One-Time Payments

  • Individuals who had up to $75,000 in adjusted gross income (AGI) in 2019 will receive a onetime payment of $1,200, while married couples with AGI up to $150,000 will get $2,400.

  • Taxpayers will receive an additional $500 for each qualified child.

  • Individuals and families with income above their respective thresholds will see their relief payments reduced by $50 for every $1,000 in AGI.

Retirement Accounts

  • Elimination of the 10% early withdrawal penalty on distributions from retirement accounts for so-called “Coronavirus-Related Distributions” with no taxes due if the money is put back within three years. If it is not put back, income taxes can be spread over three years.

  • The suspension of required minimum distributions (RMDs) in 2020 for a wide variety of retirement accounts (for both account owners as well as beneficiaries) as well as the ability to return current-year distributions.


  • An increase of $600 per week for unemployment benefits for up to four months as well as an expansion of benefits for those who would otherwise not normally qualify (like self- employed individuals and independent contractors).

Tax returns

  • The filing deadline has been extended to July 15.

  • Additional new deadlines extended to July 15: 2019 IRA contributions and 2020 first quarter estimated payments.

Student Loans

• The deferral of Federal student loan payments through September 30, 2020.

Small Businesses

  • Certain small businesses with up to 500 employees will be able to take out loans (up to $10 million depending on payroll costs and other factors), which will be eligible to be forgiven if used to cover payroll and other expenses (like rent and utilities), along with other ‘employee retention’ tax credit opportunities.

  • Delay in the employer’s portion of Social Security payroll tax until January 1, 2021 (with half of the deferred amounts due at the end of 2021, and the other half due at the end of 2022).

  • More flexible Net Operating Loss rules to obtain immediate refunds.

Big Businesses

  • $454 billion in emergency lending to states and municipalities, airlines and other businesses critical to US national security

  • $150 billion allocated proportionally to state and local governments to offset amounts used to respond to the pandemic.

We hope this summary helps highlight some of the details of the CARES Act. As always, please contact your advisor for further discussions.

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