CARE Package – How it impacts you.
The long-term social and economic impacts of COVID-19 are still widely unknown. For many Americans, it is important to understand the many financial resources that are available during these uncertain times.
On March 27, 2020, the government approved the Coronavirus Aid, Relief, and Economic Security Act (CARE). The bill was to give short-term relief for small businesses, individuals, and families that have suffered financially through the pandemic.
It is crucial to understand which of these temporary relief resources are right for you. Below is a list of key points from the CARE Act.
- Qualifying individuals should start receiving government stimulus checks. These checks start at $1,200 per adult and $500 for each child dependent. Phase-outs start at $75,000 adjusted gross income for individuals and $150,000 for couples filing joint on their taxes. For more information, visit the IRS website. https://www.irs.gov/coronavirus/economic-impact-payment-information-center
- For those of you that have money saved in a retirement account (IRA, 401K, etc.), the 10% early withdrawal penalty on distributions has been temporarily waived for taxpayers with COVID-19-related challenges. Of course, the withdrawn amount is taxable over the course of 3 years, but the amounts can be recontributed for those same 3 years without affecting contribution caps.
- All RMDs (required minimum distributions) from retirement accounts such as IRAs have been waived for the 2020 tax year.
- If you have had to file for unemployment, eligible individuals will receive an additional $600 per week (on top of maximum state allowance) and there is no waiting period for filing; however, as of right now, this amount will only last for 4 months, so don’t count on this as a long term solution.
- If your income stream has been interrupted and you can’t pay your basic bills (mortgage, car payment, etc.), check with your provider, because there are many relief programs in place. In addition, most outstanding student loans may have payments deferred for up to 6 months.
We understand these unprecedented times are extremely scary. If you need any help navigating what financial resources are available, feel free to reach out and we can review those options together.
We wish all the best to you and your family. Stay safe!