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March 31, 2020
Analyzing the CARES Act

Hello everyone,

On March 27th, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to address the unprecedented public health and economic crisis related to COVID-19.  So what does this mean for you?  I've compiled only some of the details that I think will be of most interest to you and have provided links at the end if you'd like to learn more.  Included in the referenced article at the end of this email is more information about potentially forgivable loans for small businesses to help them weather this economic shut down.

Recovery Rebate Checks
  • Checks will likely be sent sometime in May
  • Taxpayers making $75,000 and below will received a $1,200 check
    • Married couples will receive $1,200 x 2 = $2,400
    • Individuals and couples under this earnings cap also receive $500 per child
  • For those making more than the above limits, the benefit is phased out.  Multiply the amount of AGI above the limit by 5% to calculate the reduction.
  • The earnings amount is based on Adjusted Gross Income from your most recently filed tax return
  • Payments will be made into the account in which the taxpayer's most recent tax refund was deposited or the last address on file. 
  • If you have moved, separated from your spouse, or the account that your refund was direct deposited into is no longer active, the Act says the IRS will be providing a phone number for individuals to report such issues.
  • While the tax deadline for 2019 was extended until July 15th, you may want to file now so the IRS has your most recent information.

2020 Required Minimum Distributions are Waived
  • If you were required to take money from your tax-deferred retirement account in 2020 (calculated based on market value of retirement account on 12/31/2019) you no longer have to do so.
Changes to Retirement Plans: Distributions and Loans
For those that have been impacted by the Coronavirus for any of the following reasons, there are changes to the rules to help.
  • Have been diagnosed with COVID-19;
  • Have a spouse or dependent who has been diagnosed with COVID-19;
  • Experience adverse financial consequences as a result of being quarantined, furloughed, being laid off, or having work hours reduced because of the disease;
  • Are unable to work because they lack childcare as a result of the disease;
  • Own a business that has closed or operate under reduced hours because of the disease; or
  • Meet some other reason that the IRS decides to say is OK.
there are changes to the rules to help.
  • Individuals under the age of 59 ½ may access retirement funds without the normal 10% penalty that would otherwise apply but you will still owe taxes on distribution
  • For participants of employer sponsored retirement plans,
    • Max loan amount is 100% (up from 50%) of your vested balance, not to exceed $100,000 (up from $50,000)
This bill is meant to help people get back on their feet and get the economy back growing again.  For those that have not lost their livelihood, this allows them to continue participating in the consumer economy and help stimulate it.  If we continue to do our part to contain the spread of the virus while helping out local businesses and neighbors, i'm confident that we will come out of this stronger than we were before.

I'm leaving you with great new piece from Ron Copley that is going out to our clients with their quarterly reports.  Ron does a great job explaining how we think about the role of the government in our economy and how that shapes our client's investment portfolios.

How the $2T Stimulus Affects the Economy and Your Portfolio

All the best,

Justin (M: 910-612-4060)


Justin Burges
Investment Advisor Representative

CIM's goal is to provide quality financial advice at an economical cost. Whether investing for retirement or the next generation, you can rest assured that we are paying attention. Our professional credentials, independence, experience, integrity, and transparent business model qualify us to accomplish this goal.


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