Coronavirus Aid, Relief, and Economic Security (CARES) Act

Stimulus Payments

• One of the most publicized portions of the act involves cash payments of $1,200 to individuals and $2,400 to married couples.
• An additional $500 may be paid for each qualifying child.
• These amounts are subject to reduction if the individual’s Adjusted Gross Income (AGI) exceeds $75,000 ($150,000 for a married couple).
• Nonresident alien individuals and a person who is the dependent of another is ineligible to receive the payment.
• The cash payments will be based on the recent tax information available to the IRS, based on the 2018 or 2019 tax return filed, but is subject to a “true-up” based on 2020 tax return information.
• See the IRS Guide, Economic Impact Payments: What You Need to Know, for more information.
• Calculate how much you'll get from the stimulus checks.
  • Over 80% of American adults will receive a payment.

Unemployment Benefits

• Unemployment benefits will be expanded from 26 weeks to 39 weeks.
• Self-employed individuals will qualify for the first time.
• Unemployed workers will get an additional $600 per week for up to four months, on top of the normal state unemployment benefits. (Update: this benefit expired July 31, 2020.)
• Find more information at the U.S. Department of Labor.

Single-Family Mortgage Foreclosure Moratorium and Forbearance

• The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides for a moratorium on foreclosure of federally backed mortgage loans for at least 60 days.
• The act allows borrowers facing financial hardship due to COVID-19 to request a forbearance on payments on federally backed mortgages for up to 60 days.
• Borrowers may request extensions of the forbearance for up to four additional periods of 30 days each. This forbearance provision will be in effect for either the end of the COVID-19 state of emergency or December 31, 2020.

Student Loan Forbearance

• The Coronavirus Aid, Relief, and Economic Security (CARES) Act suspends payment for student loans held by the federal government until September 30th. Update: This benefit has been extended until September 30, 2021.
• Federal student loans will automatically have their interest rates set to 0% for a period for six months. Update: This benefit has been extended until September 30, 2021.
• Find more information on the Federal Student Aid website.

Retirement Funding

• Required Minimum Distribution rules for qualified plans and individual retirement accounts are suspended for 2020 to preserve asset value.
• Coronavirus-related distributions of up to $100,000 can be made with the related income tax payable over a three-year period. Additionally, the amount can be recontributed back to plan over a three-year period without affecting that year’s contribution limits.
• The limits on the amount of loans that can be taken from a qualified plan for Coronavirus-related purposes is increased to the lesser of $100,000 or 100% of the individual’s accrued benefit.
• Check out Forbes and Bloomberg for more information.

Helpful Articles

• New York Times: F.A.Q. on Stimulus Checks, Unemployment and the Coronavirus Plan
• New York Times: Your Money: A Hub for Help during the Coronavirus Crisis
• Forbes: Your Guide to the Federal Stimulus Package