The CARES Act – Tips for Individuals and Families

The CARES Act – Tips for Individuals and Families


The American household has drastically changed with the onset of the COVID-19 pandemic.  Parents are working from home while children are learning in virtual classrooms.  Some families are experiencing food uncertainty and loss of employment or wages for the first time.  With the recent passing of the CARES Act, many are hopeful that relief is on the way.  The CARES Act is impacting individuals and families through recovery rebates (stimulus checks), the use of retirement funds for COVID-19 costs, and charitable contribution changes.

Recovery Rebates
Of the $2.2 trillion available for small business, individuals, and families a total of $290 billion is set to be distributed directly to American households.  Most households will qualify, but there are some income guidelines based on Adjusted Gross Income (AGI) from your 2019 tax return, or 2018 if you haven’t already filed.

$1,200 will go to individual taxpayers, $2,400 to married couples filing jointly, and an additional $500 to families for each qualified child under the age of 17.  For those whose AGI is above the guidelines ($75,000 for individuals, $150,000 if married filing jointly, and $112,500 for heads of household) the government will deduct $5 for every $100 over the limit.  You can get an estimate of your stimulus check here.

The US Government is hoping to have stimulus money issued to households in the next few weeks.  Direct deposits will be made to those who filed with direct deposit information on their taxes in the next 3 weeks.  Paper checks could take 6-8 weeks and will be mailed to the last address on file with the IRS.  A web-based portal is in the works so that direct deposit information can be uploaded to the IRS, allowing families and individuals to avoid the lengthy processing time of paper checks.

Retirement Funds for COVID-19 Costs
Changes to retirement account withdrawals and penalties are also included in the CARES Act.  The 10% early withdrawal penalty has been waived for individuals under the age of 59 ½ those who are:

  • Diagnosed with SRS-COV-2 or COVID-19 by a CDC approved test
  • Have a spouse or dependent diagnosed with SRS-COV-2 or COVID-19 by a CDC approved test
  • Experience financial hardship due to being quarantined, laid off or furloughed, reduced work hours, or are unable to work due to the lack of child care

These withdrawals are subject to income tax, but the tax can be spread over three years starting in 2020.  If the balance of the withdrawal is paid back in three years, the income tax will be waived.  Loan limits on retirement accounts have been increased from a $50,000 maximum to $100,000, and a one-year waiver has been granted on Required Minimum Deductions (RMDs) from retirement accounts.

For specific questions on a withdrawal, loan, or RMDs from your retirement account, reach out to your financial advisor.

Charitable Contributions
Taxpayers can also take advantage of the changes made to deductions for charitable contributions.  For those that don’t itemize, a $300 deduction to AGI is available for cash donations made to qualified charities.  For taxpayers who itemize, the 60% of AGI contribution limit no longer applies to cash donations made to public charities.

For more information on which charities qualify and how to make those contributions, reach out to a tax professional. To stay up to date on the latest COVID-19 news from The Miller Group, visit our COVID-19 resource page.

Tara Lavelle, Private Risk Management


By Tara Lavelle, PRM Business Development Manager

See also:

Travel Insurance and COVID-19

How Corporate Values can Drive Crisis Response

Business Interruption Insurance and COVID-19

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