- Provides all U.S. residents with an adjusted gross income of $75,000 or less $1,200 for singles and heads of households ($2,400 for married couples filing joints returns).
- The rebate is phased out by $5 for every $100 over $75,000 that an individual receives and phased-out completely for incomes exceeding $99,000 (single), $146,000 (head of household with one child) or $198,000 (joint with no children).
- Those with children are eligible to receive an additional $500 per child.
- Those with no income, or income that comes from non-taxable benefits such as SSI, are still eligible for the rebate.
- Checks will be sent to the address or bank account used on 2018 or 2019 tax returns. No action will be required for most eligible recipients.
- Expands eligibility to include self-employed individuals and independent contractors.
- Expands eligibility to 39 weeks (through the end of 2020).
- Increases the maximum amount available by $600 per week.
- Allows for individuals who quit their jobs due to coronavirus related concerns to be eligible for unemployment assistance.
Required Minimum Distributions
- RMDs for 2020 are waived completely for IRAs and DC plans. They do not need to be made up next year.
- We are waiting for IRS guidance related to putting distributions already taken back. It was allowed in 2009.
- Waives the 10% penalty tax on early withdrawals up to $100,000 for coronavirus related hardship distributions.
- Exempts coronavirus related distributions from the 402(f) notice requirements and mandatory 20% withholding applicable to eligible rollover distributions.
- Permits the individual to recontribute the coronavirus related distribution within three years.
- Coronavirus related distributions are distributions made during 2020 to an individual who is diagnosed with COVID-19, who has a spouse or dependent diagnosed with COVID-19 or who experiences financial consequences as a result of COVID-19.
SMALL BUSINESS ASSISTANCE
Paycheck Protection Program
- A new, $349 billion lending program administered by the SBA for small businesses, nonprofits, independent contractors, sole proprietors and self-employed individuals
- Loans are fully guaranteed and 250% of an average monthly payroll from Feb. 15 – June 30, 2019. There is a $10 million cap on loans.
- Eligible uses include employee compensation, compensation of an independent contractor or sole proprietor no greater than $100,000 in one year, rent or utility payments or a mortgage interest payment.
Employee Retention Credit
Delay of Payment of Employment Payroll Taxes
Excess Business Losses
- Pass through corporations and sole proprietors are able to deduct more business losses on their taxes, freeing up cash for immediate expenses.
- The cap, first imposed in the Tax Cuts & Jobs Act, will be effective after December 31, 2020.
Download the CARES Act Key Components Overview here.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
This material was prepared by LPL Financial.
Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL Financial affiliate, please note LPL Financial makes no representation with respect to such entity.
- Not Insured by FDIC/NCUA or Any Other Government Agency
- Not Bank/Credit Union Guaranteed
- Not Bank/Credit Union Deposits or Obligations
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