The Senate has passed the CARES Act and now it is going to the House for a vote likely on Friday. After Congress has passed the act it will need to go to the President for his signature to make it law.

Here are the highlights of what I know about the act and other developments so far:

  • Federal Tax Return filing and payment deadline is delayed until July 15th, 2020.

  • Most states have followed the IRS and have also delayed their tax return filing and payment dates to July 15th, 2020.

  • IRA and HSA contribution deadlines for 2019 are delayed until the latter of your tax return filing date or July 15th, 2020.

  • Required Minimum Distributions (RMDs) are suspended for 2020 only.

  • Direct Payments to Citizens:  $1,200 for individuals and $2,400 for married couples and $500 per child under 17.  These are subject to income limitations and phaseouts based on either your 2018 tax return or 2019 tax return, if already filed. Phaseouts begin at $75,000 for individuals and $150,000 for married couples filing jointly. Technically this is based on your 2020 income but it is being advanced to you based on your 2019 or 2018 income. There is a possibility for people that make more in 2020 than they did in 2018 or 2019 that they will have to pay back this tax rebate. The rebates will be issued either via direct deposit or via check mailed to your address on your 2019 or 2018 tax return. For retired people they will use your Social Security benefit statements to process checks.

  • $500 billion lending facility for affected business and for state and municipal governments.

  • Additional unemployment benefits and the expansion of that program. Mainly add $600 on top of current weekly benefits for up to 4 months.

  • Employer side of the payroll tax is delayed for 2020. Half due by the end of 2021 and the other half due by the end of 2022.

  • Suspend federal student loan payments through September 30th, 2020. No accrual of interest during that time.

  • New exemption to the 10% early withdrawal tax penalty for IRA/401k withdrawals due to a Coronavirus related hardship.

  • Maximum retirement plan loan raised from $50,000 to $100,000.

  • New above the line tax deduction of up to $300 for charitable contributions.

Steve R. Conkin, MBA, ChFC, CFP

President - Conkin Financial Group

steve.conkin@conkinfinancial.com

405-348-6200

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