CARES Act: Coronavirus-Related Retirement Distributions
Normally, when you take money out of your 401k or IRA before Age 59-½, you’d have to pay a 10% penalty in addition to income taxes on the amount taken out.
The CARES Act does away with the 10% penalty for any distributions up to $100,000.
CARES Act: Mortgage Forbearance Request
If you have a federally backed mortgage loan and are experiencing a financial hardship due, directly or indirectly, to the COVID-19 emergency you may request forbearance, regardless of delinquency status. Many lenders are automatically offering a forbearance request for 90 days. The CARES Act provides you to request forbearance (deferral of mortgage payments) for an extended period of 180 days.
CARES Act: Unemployment Benefits
Unemployment is a resource available to those when they lose their employment. It is meant to provide a percentage of the previously earned income while you look for other employment. During this Coronavirus pandemic there have been Millions unemployed temporarily and/or permanently. Because the length of this pandemic is uncertain and the typical unemployment time may be longer than normal, benefits have been extended.
CARES Act: Student Loan Borrower Relief
Along with the goal of the CARES Act putting money into the pockets of Americans, there is also help for them to keep more money in their pockets.
You can reach out to your student loan lender immediately to learn what you need to do in order to defer your payments.
CARES Act: Paycheck Protection Program & Forgivable Loans
To help protect small businesses and their employees, the CARES Act provides a new type of loan through the Small Business Administration, a portion of which would be forgivable if used for certain types of expenses.
The CARES Act, through the Small Business Administration (“SBA”), has allocated a significant amount of money to be put towards making new SBA loans to small businesses on very attractive terms.
CARES Act: Required Minimum Distributions Waived For 2020
Required Minimum Distributions (RMDs) for 2020 are WAIVED; you do not have to take an RMD as you normally would.
Normally, if you’re over Age 70-½ (or Age 72 starting in 2020) you have to take a Required Minimum Distribution (RMD) from your pre-tax retirement accounts, such as 401ks and IRAs. Under the CARES Act, you do NOT have to take an RMD in 2020.
The RMD waiver under the CARES Act only applies to Tax Year 2020.
How Provisions of the CARES Act Will Impact You
Last week, Congress passed, and the President signed the most sweeping fiscal stimulus bill in history, The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), aimed at cushioning the economic impact that has come from the virtual shutdown of the majority of the country. To call this Act massive is to understate it. At $2 Trillion dollars in paid benefits (plus another $4 Trillion in loan guarantees) the size and scope of this Act eclipses any fiscal stimulus action in the history of our country by good measure.
The CARES Act – How Does This Affect You?
The CARES Act (they have to spend a decent amount of time making these law names sound good… right?) was officially signed into law on March 27th.
There are a significant number of provisions within the CARES Act. If you’re bored, you can read the full bill here. This blog focuses on the following provisions of the CARES Act:
[Read the Full Article]
Stay tuned for "What You Need to Know about the CARES Act (Part Two)."
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