What’s in it for you? 

President Donald Trump signed the CARES Act on March 26, 2020 with an investment commitment from taxpayer dollars of $2 Trillion – the largest financial stimulus package of its kind in our history.

The bill was intended to provide much needed relief to American citizens and businesses suffering financially from the COVID-19 coronavirus outbreak and the measures put in place to curb the spread of the disease.

Many are asking, what’s in it for me?

For individuals, about half of the allotted funds were allocated towards direct cash payments to qualifying taxpayers, and most of the remainder was earmarked for expanded unemployment benefits. Provisions included:

Cash Payments 

RMDs Waived

Retirement Plan
Penalties Waived


Unemployment Benefits

Student Loans

Charitable Deductions

Government officials acted with unprecedented speed to enact this relief. The goal was to provide some stability for individuals amidst the abrupt disruption to life as we knew it before COVID-19.

Moneta’s Tax Planning Consultant, Brighton Samet, notes that, “We are dealing with a lot of uncertainty right now while we wait for official IRS guidance for many items in these relief acts.”

From the information currently available, however, these are the key points to consider:

Cash payments

As they say, “Your check is in the mail” – if you qualify. Taxpayers without children with an adjusted gross income (AGI) of less than $99,000 (based on your latest 2019 or 2018 tax return on file) or those filing jointly with an AGI less than $198,000 are eligible for this rebate. Those taxpayers with qualifying children will be able to have an even higher income before the rebate is completely phased out.

Rebates are calculated as outlined below (subtracting $5 from the rebate for every $100 over the threshold AGI amount).



SIngle filers

Single filers will receive up to $1,200, but payments are subject to phase-outs beginning at $75,000 of adjusted gross income (AGI).


joint filers

Joint filers will receive up to $2,400 with their payments subject to phase-outs beginning at $150,000 of AGI.

Persons with children

Persons with children under age 17 will receive an additional $500 per child.

If you were not required to file a return for 2019 or 2018 but received social security benefits, the IRS announced you will also receive a payment.

These rebates are an advance on a credit that will be calculated on your 2020 tax return. The actual credit amount will be redetermined when you file your 2020 return.

  • If you do not qualify for a payment based on your most recently filed tax return, but become eligible based on the income and qualifying children on your 2020 tax return, you will instead receive a refundable tax credit for the appropriate amount on your 2020 tax returns to be filed next year.
  • Conversely, if you qualify for a payment now but earn income in excess of the phaseout thresholds in 2020, you will not be required to pay it back.

How to Receive Your Payment

Eligible taxpayers who filed tax returns for 2019 or 2018 will receive the payments automatically. Automatic payments will also go in the near future to those receiving Social Security retirement, or disability (SSDI), or survivor benefits and Railroad Retirement benefits.

If the IRS has your direct deposit information from a prior return, they will issue your rebate via direct deposit. If not, a check will be mailed before the end of the year.

The IRS website now has a “Get My Payment” tool to:

  • Check your payment status.
  • Confirm your payment type: direct deposit or check.
  • Enter your bank account information for direct deposit if we don’t have your direct deposit information and we haven’t sent your payment yet.

The tool and more information about economic impact payments is available here:

Like many new applications, the IRS website experienced problems. Some users received the message “Payment Status Not Available.” Other people encountered errors further in the process when trying to submit their direct deposit information.

The IRS has warned taxpayers to beware of scammers trying to get you to verify personal and/or banking information by phone, email, text, social media or other websites.

RMD’s waived

Required minimum distributions (RMDs) will be waived for 2020. The intent is to prevent retirees from incurring a significant loss by selling investments while the market is down.

This includes RMDs from defined contribution plans (e.g. 401(k)s) and individual retirement plans such as IRAs). Inherited IRAs are included as well.

It also includes distributions that would have been required by April 1, 2020 due to the account owner’s having turned age 70.5 in 2019 if the distribution was not already made in 2019. These individuals cannot take both a 2019 and 2020 RMD.

We are still waiting for guidance to determine if someone who already took a 2020 distribution will be able to return it. Some individuals may be able to use a 60-day rollover, but there are additional rules to consider.

UPDATE: The long-awaited guidance is here. The Internal Revenue Service (IRS) announced on June 23 that anyone who already took a required minimum distribution (RMD) in 2020 from certain retirement accounts now has the opportunity to roll those funds back into a retirement account following the CARES Act RMD waiver for 2020.


Brighton Samet, Moneta’s Tax Planning Consultant, says the guidance in IRS Notice 2020-51 greatly expands who can rollover waived required minimum distributions. Before this guidance, taxpayers were relying on a patchwork of rules that only allowed some distributions to be returned using an existing 60-day rollover provision in the tax code.

Previously, those who had taken retirement distributions in January, those that had taken more than one distribution, those with inherited IRAs, and those who had already made a 60-day rollover in the past 365 days were not eligible to repay those RMDs through a rollover. Under the new guidance, all these groups are now eligible.

The IRS has also extended the normal 60-day rollover period for certain distributions to August 31, 2020, which gives taxpayers additional time to take advantage of this opportunity.


Other related items you may want to consider:

  • If you usually pay your taxes through withholding from your retirement distributions, you may need to make estimated tax payments throughout the year.
  • Qualified charitable distributions (QCDs) are still allowed for anyone that is older than age 70.5.
  • There may be an opportunity for Roth conversions in 2020 if income will be lower.


Penalties waived for Eligible Distributions from retirement plans

Withdrawals can be made from qualified retirement accounts up to $100,000 for distributions made between January 1 and December 31, 2020 for qualified individuals.

A qualified individual is someone who is diagnosed with COVID-19, has a spouse that has been diagnosed with COVID-19, or has experienced adverse economic or financial consequences as a direct result of the COVID-19 outbreak. 

The 10% early withdrawal penalty will be waived for those younger than age 59½. Income attributable to those distributions may be spread out (and subject to tax) over three years. Also, these withdrawn funds may be recontributed within three years from distribution.  If recontributed, that part of the distribution is no longer taxable.  An amended return can be filed to claim a refund of any tax paid related to the recontributed amount.

Loans against a 401(k) have also been expanded to allow for loans up to 100% of the participant’s vested balance, up to $100,000.

Unemployment benefits expanded

The expansion of unemployment insurance is the greatest expansion of unemployment benefits in decades with increased benefits and broadened eligibility.

part 1 – increasing benefits

Those generally eligible for unemployment will be eligible for an additional $600 per week for up to four months. This program will run through December 31, 2020. The program also provides an additional 13 weeks of unemployment benefits while eliminating the initial one-week waiting period for benefit payments to begin.

part 2 – broadening eligibility

A new unemployment program has been established to provide payments to those not traditionally eligible for unemployment benefits (self-employed and those with limited work history) and who are unable to work as a direct result of the COVID-19 public health emergency. This program will run through December 31, 2020.

student loans

Payments on most Federal student loans are paused for six months without interest. In addition, collection efforts (wage garnishments, etc.) are likewise paused for six months. Borrowers will not be penalized for late payment until September 30.

Student loan repayments made by employers for an employee’s education are not taxable to the employee with an annual cap up to $5,250 for payments made prior to January 1, 2021. The $5,250 limit must be coordinated with the tax-free education payments already allowed by law.

Charitable deductions expanded 

Cash charitable deductions of up to $300 to qualified charities will be deductible for those that take the standard deduction. This deduction will be allowed “above-the-line,” which means it will reduce a taxpayer’s AGI.

For taxpayers who do itemize deductions, the legislation includes an increase of the allowable limit of charitable contribution deductions. 

The limitation on qualified cash charitable deductions (generally limited to 60% of AGI) will be suspended for 2020.

Contributions to donor-advised funds and 509(a)(3) “supporting organizations” are not considered qualified charitable contributions for either provision.

As always, stay well and let us know if you have any questions.

Revisit this site for updates on the latest.

Last updated April 20, 2020

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    These materials were prepared for informational purposes only based on materials deemed reliable, but the accuracy of which has not been verified. Given the dynamic nature of the subject matter and the environment in which these materials were prepared, they are subject to change as additional legislation and government analysis come forth. This is not an offer to sell or buy securities. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. Past performance is not indicative of future returns. These materials do not take into consideration your personal circumstances, financial or otherwise.