The Coronavirus Aid, Relief and Economic Security (CARES) Act has been signed into law. It is the largest stimulus package in United States history and will have significant impact on the economy. The bill’s purpose is to provide relief for those impacted by the coronavirus and the economic downturn. This is an overview of personal planning changes and opportunities:
- Enhanced unemployment benefits
- Stimulus payments of up to $1,200 per taxpayer and $500 per child with restrictions on income
- Paycheck Protection Program Loans and SBA Disaster Relief Loans provide forgivable loans under certain circumstances to help small businesses and encourage them to retain employees.
- Waiver of required minimum distribution (RMD) payments for 2020
- Waiver of 10% tax penalty of pre-59 ½ distributions of up to $100,000 from retirement accounts with the ability to spread the tax liability over a 3-year period (normal income tax still applies).
- The annual cap on retirement plan loans has been doubled to $100,000
Please note, this is only a small summary of the CARES Act. These provisions above will have the greatest impact on our clients.