The House of Representatives has passed the CARES Act (Coronavirus Aid, Relief, and Economic Security). This is a $2 trillion emergency relief bill. The intent, quickly put money into the hands of those who may be most impacted by the current health and financial struggles Americans are now facing.
What You Need To Know
You may be provided some financial relief. Individuals with an Adjusted Gross Income (AGI) of less than $75,000 will receive a one time check for $1200. Married couples with AGI less than $150,000 will receive $2400. Taxpayers will receive another $500 for each qualified child. If an individual or married couple’s AGI exceed these thresholds, the result is a $50 reduction of benefits for every $1000 over caps.
The CARES Act will temporarily eliminate the 10% early withdrawal penalty from retirement accounts for Covid-19 related distributions. Additionally, Required Minimum Distributions (RMD) will be suspended in 2020 for many retirement accounts (Kitces 2020).
Small businesses have been dramatically affected by the Coronavirus Pandemic. The CARES Act seeks to provide employers with some much needed support. Certain small business will be able to take out loans, “eligible for forgiveness if used to cover payroll and other expenses (like rent and utilities), along with other ‘employee retention’ tax credit opportunities” (Kitces 2020).
Americans are facing unprecedented challenges regarding both health and finance. The shelter in place orders have had a dramatic effect on finances, but the CARES Act was passed today and is expected to provide financial help immediately.
Michael Kitces at Nerd’s Eye View: Kitces, Michael. “Advancing Knowledge in Financial Planning.” Nerd’s Eye View | Kitces.com, 27 Mar. 2020, www.kitces.com/. https://www.kitces.com/blog/analyzing-the-cares-act-from-rebate-checks-to-small-business-relief-for-the-coronavirus-pandemic/
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