This is Part 2 of our Caring about the New CARES Act series. You can read Part 1, an Overview, here.
While we know everyone is aware of the stimulus checks that the government has promised, there are other provisions under the CARES Act that may help individuals and families who are struggling and nervous during this time. We wanted to outline some of the provisions in the CARES Act including who can benefit from them.
Stimulus Checks – Part of the CARES Act includes direct stimulus checks to individuals and families from the government for those who qualify. How much are the payments and who will get them? The stimulus checks will be in an amount up to $1,200 for individuals or $2,400 for married couples. Families will also receive an additional $500 for each qualifying child under the age of 16. Individuals with adjusted gross income under $75,000 per year will receive the full $1,200 and married couples with a total adjusted gross income under $150,000 per year will receive the full $2,400. If individuals or couples make over these income limits, the payment amounts will be reduced. Individuals earning $99,000 or more per year will not receive a stimulus payment and neither will couples earning $198,000 or more. Your income will be determined off your 2019 taxes if you have already filed your taxes. If you have not yet filed your taxes, the IRS will use your 2018 taxes to determine your income. The stimulus checks may be direct deposited into your account if you provided the IRS with that information for any tax refund, but if not you will receive a check in the mail. The IRS has already begun working on sending out checks and some people may begin to receive their checks as early as the week of April 13, 2020.
Expanded Unemployment Benefits – Under the CARES Act, unemployment benefits have been temporarily expanded to include additional payments and to cover more individuals that may not have been previously covered. Workers who were unemployed, who experienced reduced hours, or were simply unable to work because of the virus are covered for unemployment benefits. It also expanded benefits to include other individuals who typically were not eligible for benefits before including self- employed individuals and independent contractors. Under the CARES Act, workers may be eligible to receive an additional $600 a week in payments through July 2020. The length of time that a person can collect unemployment has also been extended during the COVID-19 crisis.
Provisions regarding Retirement Accounts – The CARES Act also temporarily changed and expanded provisions for loans and withdrawals on retirement accounts (such as IRAs, 401(k)s and 403(b) plans). An individual can take a virus-related distribution from their retirement account up to $100,000 without the early withdrawal penalty. In addition to this, the tax that would be due on the income of the distributions can be spread over the next three years. The act also increased the amount a person can borrow from their qualified plan from $50,000 to $100,000. Finally, the act suspended required minimum distributions from these accounts in 2020 and any person that does not take a required minimum distribution in 2020 will not be charged the penalty for not taking the distribution.
Federal Student Loan Relief – For any of our clients who still have student loans or have children with student loans, the CARES Act suspended payments due on federal student loans without interest accruing until the end of September.
All these programs in the CARES Act are in place to help individuals and families manage the current ongoing situation with COVID-19. We at Family Estate Planning Law Group can also help by making sure your estate plan is in great shape should something happen to you or your family.
To learn more about how we can help you take care of your family, visit our website, explore our blog, and schedule your complimentary consultation today!