What Emergency Relief Options Should I Consider During The Coronavirus Pandemic?
Based on the latest tax return you filed, is your AGI below $75,000 ($150,000 MFJ)?
If so, you may qualify under the CARES Act for direct checks from the government up to $1,200 if single ($2,400 if MFJ) and up to $500 for each child under age 17. These recovery rebates are subject to phaseouts starting at the AGI levels listed above.
Has there been a disruption in your employment for reasons related to coronavirus?
If so, consider the following:
Under the Families First Coronavirus Response Act, if your employer has fewer than 500 employees, you may be eligible for 10 days of sick leave (fully-paid or partially-paid, depending upon your circumstances), and up to 50 days of partially-paid family leave for workers caring for children due to school and daycare closures.
The CARES Act has further expanded eligibility for unemployment benefits, increased payments up to $600 per week, and extended the benefits period by 13 weeks.
State unemployment programs have also been expanded.
Do you need cash from your retirement accounts?
If so, consider the following:
If you, your spouse or a dependent were diagnosed with COVID-19 or financially impacted by COVID-19, the CARES Act provides a new “Coronavirus-Related Distribution” of up to $100,000 exempt from the 10% penalty and mandatory withholding.
The income from the distribution can be reported over a 3-year period, beginning in 2020. These distributions can be rolled back, in whole or in part, into the account within 3 years of the distribution.
The CARES Act increased the maximum loan amount allowed from retirement plans from $50,000 to $100,000 for individuals impacted by coronavirus (during the 180-day period following enactment). Such loans may equal, but not exceed, the vested balance. Payments on such loans that should be made during 2020 can be delayed for up to one year.
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What Emergency Relief Options Should I Consider During The Coronavirus Pandemic?
Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.
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