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The CARES Act

The CARES Act Has Passed: Here Are The Highlights

On Friday, March 27, 2020, President Donald Trump signed it into law a $2 trillion coronavirus economic stimulus bill. This legislation is aimed at providing relief for individuals and businesses that have been negatively impacted by the coronavirus outbreak. Select key provisions are listed below. For full details on the CARES Act, please visit the U.S. Department of Treasury's page dedicated to the Bill

Some of the key provisions in the CARES ACT include:

  • Direct payments: Americans who pay taxes will receive a one-time direct deposit of up to $1,200, and married couples will receive $2,400, plus an additional $500 per child. The payments will be available for incomes up to $75,000 for individuals and $150,000 for married couples.
  • Unemployment: The program provides $250 billion for an extended unemployment insurance program and expands eligibility and offers workers an additional $600 per week for four months, on top of what state programs pay.
  • Payroll taxes: The measure allows employers to delay the payment of their portion of 2020 payroll taxes until 2021 and 2022.
  • Use of retirement funds: The bill waives the 10% early withdrawal penalty for distributions up to $100,000 for coronavirus-related purposes, retroactive to Jan. 1. Withdrawals are still taxed, but taxes are spread over three years, or the taxpayer has the three-year period to roll it back over.
  • 401(k) Loans: The loan limit is increased from $50,000 to $100,000
  • RMDs suspended: Required Minimum Distributions from IRAs and 401(k) plans (at age 72) are suspended.
  • Small business relief: $350 billion is being dedicated to preventing layoffs and business closures while workers have to stay home during the outbreak. Companies with 500 employees or fewer that maintain their payroll during coronavirus can receive up to 8 weeks of cash-flow assistance. If employers maintain payroll, the portion of the loans used for covered payroll costs, interest on mortgage obligations, rent, and utilities would be forgiven.
  • Large corporations: $500 billion will be allotted to provide loans, loan guarantees, and other investments, these will be overseen by a Treasury Department inspector general. These loans will not exceed five years and cannot be forgiven.
  • Hospitals and health care: The deal provides over $140 billion in appropriations to support the U.S. health system, $100 billion of which will be injected directly into hospitals.
  • Coronavirus testing: All testing and potential vaccines for COVID-19 will be covered at no cost to patients.
  • States and local governments: State, local and tribal governments will receive $150 billion. $30 billion is set aside for states, and educational institutions. $45 billion is for disaster relief, and $25 billion for transit programs.
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