By Alex Burum
CARES Act Coronavirus Aid Relief Economic Stimulus Act (CARES)
Parts of the stimulus law impact RMDs, Loans, student Loan Debt, HSA accounts. Here are some highlights…attached are more details
Here is a detailed description of most, if not all areas: https://link.zixcentral.com/u/cf636ec9/YDq8gvly6hGerROsKHgf9A?u=https%3A%2F%2Fwww.foley.com%2Fen%2Finsights%2Fpublications%2F2020%2F03%2Fcoronavirus-cares-act-enacted-into-law
RMD’s
2020 RMD is WAIVED for anyone who would have to take an RMD by Dec 31, 2020.
PlanMember is adjusting their system to accommodate but cannot do anything across the board as individual client situations vary …. Watch for updated info
Clients may need the funds so will continue to take distribution
Clients may be in a low tax bracket during 2020 so it behooves them to take a withdraw
403(b)/401(k) LOANS
Outstanding loans may defer payments for up to 1 year
The max. loan amounts have doubled 100% of acct balance up to $100,000 for 2020
If clients need money…better they take a loan and be required to rpay into their account then jeopardize their current retirement savings
Pre 59½ withdraws – 10% Penalty waived for coronavirus related distribution during 2020
A “coronavirus-related distribution,” as defined under the CARES Act, is generally defined as any distribution from an eligible retirement plan made: (i) on or after January 1, 2020 and before December 31, 2020, (ii) to an individual (a) who is diagnosed with COVID-19, (b) whose spouse or dependent is diagnosed with COVID-19, or (c) who experiences adverse financial consequences as a result of being quarantined, furloughed, laid off, had hours reduced, or other factors as determined by the Secretary of the Treasury during the COVID-19 pandemic.
Max amount is $100,000. Distribution subject to normal taxes but not 10% penalty. Taxes payable over a 3 year period not all due in 2020.
Alex Burum is a local businessman, writer and activist
Get Citizensjournal.us Headlines free SUBSCRIPTION. Keep us publishing – DONATE
