Highlights of the CARES Act (Coronavirus Aid Relief, and Economic Security)

DEWITT, Mich. - Nov. 9, 2020 - PRLog -- The CARES (Coronavirus Aid Relief, and Economic Security) Act was signed into law to help provide financial stability and relief for individuals and businesses affected by COVID-19. While the bill is very broad and addresses a number of areas and industries, we believe the following are important to highlight for individuals and their families.

Cash Payments and Unemployment Assistance

• 2020 Stimulus Checks: U.S. residents with adjusted gross income up to $75,000 ($150,000 joint filers) are eligible for a $1,200 ($2,400) payment, as well as an additional $500 per child (under age 17).

• This amount is reduced by $5 for every $100 over the income limit above, so it would be fully phased out for those with incomes over $99,000 (single) and $198,000 (joint filers) with no children.

• Increased Unemployment Assistance: Provides an additional $600/week payment to each recipient of unemployment insurance through July 31, 2020.

• Provides an additional 13 weeks of unemployment benefits through Dec. 31, 2020, for those who remain unemployed after state unemployment benefits are no longer available.

Retirement Account Changes

As we navigate through this challenging environment, we want to make sure you know about several provisions within the CARES Act that you may want to consider for your IRAs and employer retirement plans, including:

• No penalty on early withdrawals
• Increase of retirement plan loan limit
• Required minimum distributions (RMDs) are waived for 2020

Enhanced Tax Benefits for Charitable Gifts

• $300 Deduction of Cash Contributions: Ability for an above-the-line deduction of up to $300 of cash contributions to charities, regardless of whether the individual itemizes deductions.

• Changes to Limits on Charitable Contributions:

• Individuals: For those who itemize their deductions for charitable giving, the 60% of adjusted gross income limit for cash gifts is suspended for 2020.

• Corporations: The 10% limit on charitable contributions is increased to 25% of taxable income.

Homeowners, Renters and Student Loan Holders

Whether you are a homeowner or a renter, the CARES Act may provide some relief for your situation. Student loan payments have also been suspended through Sept. 30, 2020. We created some helpful information about these provisions, as well as recommendations for you to consider.

Student Loans/Education

• Loan Payment Suspension: Suspends payments automatically for federally held student loans through Sept. 30, 2020, with no interest accruing or penalties during the period of suspension.

• Additional Provisions: Contains a variety of other emergency-relief provisions related to education, and specifically the impact of many students being sent home mid-semester. For example, it allows universities to make payments to students who were unable to complete work-study programs.