Support for Individuals & Families
The bill includes several provisions to help provide direct and indirect financial assistance to individuals and families in an effort to stimulate our economy and protect the financial well-being of our citizens. The following are just some of the ways the CARES Act may help individuals and families:
Tax-paying Americans will receive a one-time direct deposit of up to $1,200 for individuals and $2,400 for married couples, 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. For filers with incomes above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds.
That means a family of four earning less than $150,000 can expect $3,400. Payments start to phase down after that and disappear completely for people making more than $99,000 and couples making more than $198,000.
For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same bank account reflected on the return filed.
For those individuals whom the IRS does not have your direct deposit information, the Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so they can receive payments immediately as opposed to checks in the mail.
The distribution of payments will begin in the next three weeks and will be distributed automatically, with no action required of most people. However, some seniors and others who typically do not file returns will need to submit a simple tax return to receive the stimulus payment. For more details visit the IRS website.
In addition to direct payment assistance, the CARES Act also helps in the following ways:
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.
Use of Retirement Funds
The Act waives the 10% early withdrawal penalty for distributions up to $100,000 for Coronavirus-related purposes, retroactive to January 1, 2020. Withdrawals are still taxed, but taxes are spread over three years, or the taxpayer has the three-year period to roll it back over.
The loan limit is increased from $50,000 to $100,000.
Required Minimum Distributions from IRAs and 401(k) plan (at age 72) are suspended.
Fraud Protection Update
As the IRS gets ready to send these payments to millions of Americans, it’s important to be aware of fraudulent scams that are beginning to surface. Please know the federal government will not ask anyone to confirm personal or banking details by email, phone or text message. It also won’t demand a “processing fee” to obtain or expedite your stimulus payment. Do not click on links in email or text messages relating to the stimulus checks and do not provide your personal information. For additional details, please visit the Washington Attorney General’s website.