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The CARES Act - Details That May Impact You

The CARES Act - Details That May Impact You

April 03, 2020
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Legislation recently passed to deal with the COVID-19 crisis: “Coronavirus Aid, Relief, and Economic Security Act” or “CARES Act”

CARES Act - Provides Benefits to Individuals and Families:

  • Cash payments to individuals ($1200) or married couples ($2400) by direct deposit or check within next few weeks
  • Income limits of $75,000/$150,000 graduated up to $99,000/$198,000 to receive cash payment
  • Social Security recipients will receive cash payments as well (the same way they receive their Social Security payment)
  • Sec. 2201. 2020 Recovery Rebates For Individuals


CARES Act - Specifically Addresses Required Minimum Distributions (RMDs):


CARES Act -  Allows Hardship Withdrawals from Retirement Accounts with No Early Withdrawal Penalty:

  • Waiver of 10% penalty if withdrawn prior to age 59 ½
  • For COVID-19 Related Hardship withdrawals Not to Exceed $100,000/year (for 3 years)
  • Tax Liability can be stretched over a period of 3 Tax years starting with the Calendar Year distribution is taken
  • Funds can be Repaid into Retirement Account Any Time During 3 year period Beginning the day after Distribution was received
  • Please consult your CPA or Tax Professional to discuss your specific tax situation
  • Sec. 2202. Special Rules For Use Of Retirement Funds


CARES Act - Expands Unemployment Criteria and Benefits:


CARES Act - Provides Relief to College Graduates:


CARES Act - Provides Small Business Benefits and Programs:

To read the full text of the Bill, please click the link below.


The information is based on data gathered from what we believe are reliable sources. It is not guaranteed by Waddell & Reed, Inc. as to the accuracy and is not intended to be used as the basis for any investment decisions.  This is meant to be general, and it is not investment or financial advice or a specific recommendation of any kind. Opinions and forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time. Actual results could differ materially from those anticipated. Please consult your financial advisor before making financial decisions.  Waddell & Reed does not offer tax or legal advice.  (04/03/20)