As we’re all dealing with the effects of COVID-19 on our lives, I want to share encouraging news: the government has approved the $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act which will help millions of people in this critical time. Perhaps even you.

This sweeping legislation is unprecedented in the history of our nation and provides significant economic assistance to address the impact of COVID-19. The CARES Act is over 800 pages long, but here are some of the economic provisions most relevant for you.

If you would like to learn more about all the contents in the CARES Act, please see this article.

KEY DEFINITION

A coronavirus-related distribution is a one made to an individual: (1) who is diagnosed with COVID-19, (2) whose spouse or dependent is diagnosed with COVID-19, or (3) who experiences adverse financial consequences as a result of being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to lack of child care due to COVID-19, closing or reducing hours of a business owned or operated by the individual due to COVID-19, or other factors as determined by the Treasury Secretary.

WHO WILL RECEIVE A 2020 RECOVERY REBATE

• All U.S. residents with adjusted gross income up to $75,000 ($150,000 married), who are not a dependent of another taxpayer and have a work eligible social security number, are eligible for the full $1,200 ($2,400 married) rebate. In addition, they are eligible for an additional $500 per child.

• The rebate amount is reduced by $5 for each $100 that a taxpayer’s income exceeds the phase-out threshold. The amount is completely phased-out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children.

ADDITIONAL HELP: RETIREMENT PLAN WITHDRAWALS

• On IRA distributions before Dec. 31, 2020, tax relief will permit in-service distributions, even if such amounts are not otherwise distributable from the plan under the Internal Revenue Code

• It exempts the distribution from the 402(f) requirements and mandatory 20% withholding applicable to eligible rollover distributions

• The new act waives the 10% early distribution penalty on up to $100,000 of 2020 distributions from IRAs and company plans for “affected individuals”. The tax would be due, but could be spread evenly over three years, and the funds could be repaid over the three-year period.

RETIREMENT LOAN RELIEF

• First, the CARES Act will increase the maximum loan limit for qualified individuals to the lesser of:$100,000; or the greater of $10,000 or 100% of the present value of the participant’s vested benefit. This increased loan amount would be available for loans made during the 180-day period beginning on the date of enactment

• In addition, the CARES Act will extend the due date of any qualified individual’s loan repayment that would otherwise be due during 2020 to one year after the otherwise applicable due date.

CARES ACT REQUIRED MINIMUM DISTRIBUTION (RMD) CHANGES

• A true waiver that does not need to be made up after 2020. RMDs for 2020 are waived for for all types of defined contribution retirement plans (including 401(k), 403(b), and governmental 457(b) plans) and IRAs.

COVID-19 RELATED JOB LOSS

• States will still continue to pay unemployment to people who qualify. This bill adds $600 per week from the federal government on top of whatever base amount a worker receives from the state. That boosted payment will last for four months