Insight

CARES Act will provide billions of dollars of relief to individuals, businesses, state and local governments, and the health care system

After extensive negotiations between the U.S. House of Representatives, the U.S. Senate and the White House, an agreement has been reached on a massive stimulus bill to address the financial and health care crisis resulting from the coronavirus (COVID-19) pandemic.

As of this writing, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) has been passed by the Senate and is expected to be passed by the House, although the mechanics are still to be determined because most House members are currently in their home districts. The President has indicated that he will sign the legislation.

The CARES Act includes a “Marshall Plan” for the health care system to help provide needed treatment during the pandemic and financial assistance to state, local, tribal and territorial governments, as well as to private nonprofits providing critical and essential services. It also provides significant relief to individuals, businesses and other employers to help them weather the pandemic.

Key provisions for individuals, businesses and other employers

Here’s a quick look at some of the CARES Act provisions that may affect you — keep in mind that it’s possible that some provisions could change before the act is signed into law:

Individuals

  • Recovery rebates of up to $1,200 for singles, $1,200 for heads of households and $2,400 for married couples filing jointly — plus $500 per qualifying child — subject to income-based phaseouts starting at $75,000, $122,500 and $150,000, respectively
  • Expansion of unemployment benefits, including for self-employed and gig-economy workers
  • Waiver of the 10% penalty on COVID-19-related early distributions from IRAs, 401(k)s and certain other retirement plans
  • Waiver of required minimum distribution rules for IRAs, 401(k)s and certain other retirement plans
  • Expansion of charitable contribution tax deductions
  • Exclusion for certain employer payments of student loans

Businesses and other employers

  • Retention tax credit for eligible employers that continue to pay employee wages while their operations are fully or partially suspended as a result of certain COVID-19-related government orders
  • Deferral of the employer portion of payments of certain payroll taxes
  • Modification of net operating loss (NOL) and limitation on losses rules
  • Modification of the deduction limitation on business interest
  • Qualified improvement property technical correction, allowing qualifying interior improvements of buildings to be immediately expensed rather than depreciated over 15 years
  • Expansion of the ways the Small Business Administration (SBA) can help small businesses

More details to come

This is just a brief overview of the CARES Act. We will share additional details on the provisions that are likely most relevant to you or your business in the coming days. In the meantime, don’t hesitate to reach out to us with questions or concerns you have about taxes or your individual financial or business situation. We’d be pleased to help you during this challenging time.

© 2020

Related Insights

The kiddie tax: Does it affect your family? | tax preparation in cecil county | Weyrich, Cronin & Sorra

Tax Prep, Planning & Strategy

The kiddie tax: Does it affect your family?

Many people wonder how they can save taxes by transferring assets into their children’s names. This tax strategy is called income shifting.…
Weathering the storm of rising inflation | tax accountant in elkton md | Weyrich, Cronin & Sorra

Tax Prep, Planning & Strategy

Weathering the storm of rising inflation

Like a slowly gathering storm, inflation has gone from dark clouds on the horizon to a noticeable downpour on both the U.S. and global economies.…
When should you turn down an inheritance? | estate planning cpa in washington dc | Weyrich, Cronin & Sorra

Estate & Wealth Transfer Planning

When should you turn down an inheritance?

“Thanks, but no thanks.” If you expect to receive an inheritance from a family member, you might want to use a qualified disclaimer to refuse…

Connect with us

Use the form below to send us an email. WCS responds directly to all inquiries and general questions within 24 hours of posting.

This contact form is deactivated because you refused to accept Google reCaptcha service which is necessary to validate any messages sent by the form.