The CARES Act: An Overview
Yesterday, President Trump signed the Coronavirus Aid, Relief and Economic Security Act (CARES) into law after unanimous approval by the Senate and voice vote passage in the House. At 883 pages and $2.2 trillion, it is the largest relief bill in U.S. history and goes to extraordinary lengths to provide relief for taxpayers and businesses to keep them afloat through this unprecedented crisis. A sampling of what’s included:
- Establishes the Paycheck Protection Program providing up to 10 weeks of cash-flow assistance to companies with less than 500 employees that would be largely forgiven to companies that maintain their payrolls through the crisis. This program is being administered by FDIC Insured banks approved by the SBA. Please contact your banking officer to begin an application.
- NOL (net operating loss) provision allows five-year carryback of net operating losses arising in 2018, 2019 or 2020.
- Direct payments to taxpayers of up to $1,200 for individuals, $2,400 for married couples, and $500 per dependent child.
- Penalty-free early withdrawal of retirement funds up to $100,000, retroactive to January 1, 2020. The tax on withdrawals is spread out over 3 years.
- Waiver of Required Minimum Distributions (RMD’s) during 2020. Taxpayers may elect not to take their RMD’s.
- $250 billion unemployment extension that expands eligibility and offers workers an additional $600 per week for four months, on top of what state programs pay.
- Payroll tax relief that permits employers to delay payment of their 2020 payroll taxes until 2021 and 2022.
We’re parsing the legislation now and will share insights and advice in the days and weeks to come. In the meantime, please visit the COVID-19 News and Information Center on our website for more information and resources.
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