During this time of crisis and uncertainty, many families and individuals are left with no end in sight. Many unemployed and unsure of where their next paycheck will come from. As each day passes and we continue to navigate the COVID-19 crisis, recent encouraging news has risen as the US Government approves a $2 trillion Coronavirus Aid, Relief and Economic Security, otherwise known as the CARES Act.
The CARES Act will provide significant economic assistance for many families, companies and individuals. Here is a breakdown of the facts as it pertains to you:
• Payments: The majority of adults will receive $1,200. For households with children, for every child age 16 or younger, the payment will be an additional $500. There will only be one payment.
• Are you eligible for the full amount? The amount you will receive is dependent on the income you make and the number of household individuals:
-Single adults with an income of $75,000 or less will receive the full amount
-Married couples with no children earning $150,000 or less will receive $2,400
-Taxpayers filing as head of household earning $112,500 or less will receive the full amount
-A family with two children will no longer be eligible for any payments if its income surpassed $218,000
• How long will the payments last? If you have recently become unemployed, the bill will allow for an extension on the number of weeks you will receive unemployment. The CARES Act offers an additional 13 weeks of unemployment benefits; however, you may not exceed 39 weeks of unemployment.
• When will the payments arrive? Most people will receive their payments within three weeks.
• Will eligible unemployed individuals and veterans receive these payments? Yes, both veterans and the unemployed are eligible.
• Unemployed: This program includes many additional workers that would not typically be eligible for unemployment including self-employed and part-time workers.
• Freelancers, independent contractors and small business owners: Self-employed workers are now eligible for unemployment benefits. Benefits for this type of worker will be based on previous income and now becomes eligible for an additional $600 weekly provided by the federal government.
• Temporary school and daycare closures: Employment benefits have been extended to individuals that rely on daily childcare and are now being forced to stay home due to daycare and school closures.
• Length of time you will need to wait for these benefits: States have been encouraged to waive the one-week waiting period.
• Bill exclusions: Individuals who have the ability to work from home while still receive a paycheck and those who have been given paid sick leave or time off will not be eligible.
• Which retirement account rules are suspended? For the remainder of 2020, there will be no need to take a required minimum distribution from any retirement savings plans. You can allow investments to sit in your account if the money is not crucial to you at this time.
• Can I still borrow from my 401(k) or another workplace retirement plan? With proof you’ve been affected by the Covid-19 crisis, you will have the ability to withdraw a loan of up to $100,000, 180 days after the bill passes. This surpasses the rule: You cannot withdraw more than half your balance.
• Making charitable donations: This bill will make a new deduction available up to $300 in annual charitable contributions made available for individuals who do not itemize their deductions. You must give cash to a qualified charity, not a donor-advised fund, in order to qualify.
• New charitable deductions: Donors can now deduct their charitable gifts and donations against their 2020 adjusted income.
• For 120 days, renters will be given a grace period including a nationwide eviction suspension and zero charges, late fees or penalties enforced by the landlord.
If you have questions or need any assistance, please do not hesitate to reach out. We would love to connect with you!