For Individuals: New COVID-19 Federal Assistance – CARES Act
The Cares Act, passed March 27, 2020, provides economic relief to individuals to help families cope with the financial impact of the pandemic.
Below follows a summary of the provisions, with more to come as details unfold.
Provisions for Individuals
- Retirement Plans Withdrawals
- no 10% penalty on early withdrawals up to $100,000 for coronavirus-related distributions. Must be made to you or your spouse diagnosed with COVID-19 with CDC-approved test,
- you experienced adverse financial consequences as result of quarantine, business closure, layoff, or reduced hours due to virus
- Required minimum distributions are waived for 2020 regardless of impact by virus
- Charitable Contributions – allows deduction of up to $300 for charitable contributions with no limit (above-the-line so to speak.)
- Recovery Rebates – advance refunds of credits against 2020 taxes
- $1,200 for individuals
- $2,500 for married joint filers
- $500 credit for each child
- Rebate amounts will be phased out (reduced) by $5 for every $100 over adjusted gross income reported on your 2018 tax return (unless 2019 has been filed):
- single $75,000,
- head of household $112,500,
- $150,000 joint filers
- Limits – Zero rebates if adjusted gross income is over
- individuals (single filers) $99,000;
- heads of household $136,500,
- joint filers $198,000
- Eligibility – must have social security numbers
- Timing – Secretary directed to provide rebate as rapidly as possible.
- Student loans paid by Employers – Employer can pay for up to $5,250 of student not taxable to the employee