Edward Jones Educates Community on CARES Act and Potential Opportunities

Bethany Arnold with Edward Jones (www.edwardjones.com) financial advisors is educating the community on the significance of the passage of the coronavirus Aid, Relief, and Economic Security (CARES) Act to spread a jolt of good news in an otherwise deeply unsettling time. She identified several important components of the CARES Act for people to understand and benefit from in the coming weeks. 

Arnold explained that individuals will receive a one-time direct payment of up to $1,200, reduced for incomes over $75,000 and eliminated altogether for incomes of at least $99,000. Joint filers will receive up to $2,400, with this amount reduced for incomes over $150,000 and eliminated at $198,000 for joint filers with no children. Taxpayers with children will also receive an extra $500 for each dependent child under the age of 17. 

Arnold also explained that the CARE Act provides $250 billion for extended unemployment insurance, expands eligibility, and provides workers with an additional $600 per week for four months, in addition to what state programs pay. Unemployment benefits will also be extended through December 31 for eligible workers. Provisions also cover the self-employed, independent contractors, and “gig economy” workers.

Arnold further explained that, typically, individuals must pay a 10% penalty on early withdrawals from IRAs, 401(k)s, and similar retirement accounts. Under the CARES Act, this penalty will be waived for individuals who qualify for COVID-19 relief for distributions up to $100,000 in aggregate from IRAs and plans that allow COVID-19 distributions. Withdrawals will still be taxable, but the taxes can be spread out over three years. Additionally, Arnold explained that owners of traditional IRAs and 401(k)s are usually required to start taking withdrawals from these accounts once they reach 72. The CARES Act waives these required minimum distributions for 2020. Also, 401(k) investors who qualify for COVID-19 relief can now borrow up to $100,000 from their accounts—up from $50,000—provided their plan allows loans. 

Arnold also told how the CARES Act provides $349 billion to help small businesses to retain workers and avoid closing up shop, in part through the Paycheck Protection Program, which provides federally-guaranteed loans to small businesses that maintain their payroll during this emergency. Significantly, these loans may be forgiven if borrowers use the loans for payroll and other essential business expenses (such as mortgage interest, rent and utilities) and maintain their payroll during the crisis.

Edward Jones provides financial services for individual investors in the United States and, through its affiliate, in Canada. You can contact Bethany Arnold to learn more at (402) 421-7418 / bethany.arnold@edwardjones.com or go online to www.edwardjones.com.