In this very difficult time, I know you are concerned about the financial health of your family, friends, and employees. Below is summary information for the Economic Security Act of 2020 and some important lessons learned. Please visit our website blog, http://www.pjsservicesgroup.com/blog/, for more articles and information.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 & Other Related COVID-19 Government Actions

Key Takeaways

Individuals & Families

• Recovery Rebate Check$1200 per person$500 per child under 17Expected payouts to occur in late April and/or early May. Tax Credit for 2020 Phase out at $150k married filing joint, $112,500 filing head of household, $75K filing single, phase out does not affect per child rebateBased on most recent tax return (2018 or 2019)SS will get theirs with SS checksOthers Direct Deposit where they received their 2018/19 refundOtherwise last known address on fileIRS Form 8822 to give IRS new address

Filing Status	Full Rebate	Partial Rebate	No Rebate
Single	< $75,000	$75,001 – $99,000	> $99,000
Married Filing Jointly	< $150,000	$150,001 – $198,000	> $198,000
Head of Household	< $112,500	$ 112,501 – $146,500	> $146,500

Lessons Learned: The fastest and easiest way to make sure you receive this check is the login to the IRS website and provide them your banking information (especially if you are a non-filer). You can also check the status of this check. However, your check status will not show any information until your deposit is pending or your check has been mailed. My clients have found that soon after they provided their direct deposit information with the IRS they received their stimulus check. To confirm your banking information, go to https://www.irs.gov/coronavirus/get-my-payment.

• Unemployment Compensation
• Temporary assistance for unemployed, self-employed, and independent contractors for up to four months at $600 per week.
• Pandemic Unemployment assistance for self-employed (by state) if you don’t qualify for state funded unemployment.
• Individuals with reduced hours may be eligible for pro-rated unemployment benefits.

Lessons Learned: Employees that were fired or laid off and those that are self-employed are both eligible for unemployment. The self-employed applicant may get denied from the Texas Workforce. However, if you are denied you need to make sure you send them information that you are applying under the Stimulus Cares Act and provide them details you were self-employed (typically your tax information).

• Required Minimum Distributions (RMDs)

RMDs are waived for calendar year 2020. Applies to first RMD for 2019 (April 1^st deadline) and annual RMDs (December 31^st deadline).

• Retirement Plan Distributions

Coronavirus related distributions

• 10% Penalty Waived
• Distributions of up $100,000
• 100% of invested balance may be used
• Taxable Income can be reported over 3 Years
• Funds can be replaced within 3 Years without affecting annual contribution amounts.
• Must be made in 2020
• Must be because of:
  • Diagnosed with Covid-19
  • Spouse or dependent diagnosed with Covid-19
  • Experiencing adverse financial consequences because of disease
  • Owned a business that closed or has reduced hours
  • Cannot find childcare
• Plan participant self certifies they are qualified

Lessons Learned: This is great for those that would normally take RMD’s to delay their withdrawal during a period when their retirement account values may have been severely hit in value by the market downturn.  Taking early withdrawals from your retirement plan can go wrong in the following ways; if you do not replace the money you will have an increase in your taxable income, you may be withdrawing assets with their value is low and repurchasing when the value is high, thus negatively impacting the long-term value of your retirement assets.

• Tax Deadlines & Payments

No action required. Automatically extended for all individual taxpayers and trusts.

Type	Deadline
2019 Tax Filing	July 15th, 2020
2019 Tax Payment	July 15th, 2020
1st Quarter – 2020 Estimated Tax Payment	July 15th, 2020
2nd Quarter – 2020 Estimated Tax Payment	June 15th, 2020*

                              *Remains unchanged at this time.

• IRA & HSA Contributions

2019 contributions for retirement accounts and health savings accounts (HSAs) can be made up to July 15^th, 2020.

• Student Loan Relief

Payments and interest for federally held loans will be suspended until September 30^th, 2020.

Collection on federal student loan debt is suspended.

Lessons Learned: You should confirm that your interest has been suspended. If you have the financial flexibility this is a good time to pay down the principal. Even though the interest has been suspended you can still make payments toward the principal amount.

• HealthCare
  • FSA, HSA, and MSA accounts can now be used to purchase Over-the-Counter drugs and medicines including male and feminine products.
  • Medicare beneficiaries receive at no-cost COVID-19 vaccine (when available)
  • Telehealth services temporarily covered by HSA-eligible HDHP

• Mortgages and Other Debts
  • Fannie Mae and Freddie Mac have suspended foreclosures and evictions for 60 days
  • FHA imposed 60-day foreclosure and eviction moratorium for single family homeowners and FHA insured mortgages
  • Federal reserve cut interest rates, which helps homeowners looking to refinance and reduces rate on other debt, such as credit cards

Lessons Learned: You must call your mortgage company, or any other companies that you may be indebted. Most have specific lines that will work with you to suspend your payments. The suspension/delays may cost you more in interest over the long term.

Small Businesses

• Family Leave
  • Requires certain employers to provide employees with paid sick leave
  • Requires up to two weeks
  • May be covered up to an additional 10 weeks
  • Small businesses with fewer than 50 employees may qualify for an exemption

https://www.dol.gov/agencies/whd/fmla/pandemic

• Loans
  • Paycheck Protection Program

https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp

Forgivable portion of the loan equals 100% of amounts spent on the following items during the 8-week period following the issuance of the loan:

• Payroll, excluding prorated amounts for individuals with compensation greater than $100,000
• Rent pursuant to a lease in force before Feb 15, 2020.
• Electricity, gas, water, transportation, phone, internet for services in force prior to Feb 15,2020
• Group health insurance premiums and other healthcare costs

*there are requirements post the 8 weeks in order to get the loan forgiven. Otherwise, it will convert to a low interest loan at a rate no greater than 4% with options to defer payments 6 – 12 months. Specific provisions should be discussed with the funding source.

• Economic Injury Disaster Loans

https://www.sba.gov/funding-programs/disaster-assistance

Loan up to $2 million, 3.75% interest rate, first payment delayed 1 year from date of origination.

• Not more than 500 employees
• Sole prop and ESOPs eligible
• Must have suffered economic injury
• Potential for $10k emergency cash grant
• Waiver of no-ability-to-get-credit elsewhere rule

Lessons Learned:  These loans started off badly for the small business owner. The initial execution problems have been improved and more funds are getting to small businesses. If you are looking for funding from the PPP loan the key success factor is the bank you choose to work with for funding. My clients have found that the regional banks have been much more responsive (timely) that the larger banks. The PPP loan can be forgiven, which is great. However, if for some reason, you cannot meet the hurdles to be forgiven from the PPP Loan, both loans still the cheapest money you will ever get for your business.