COVID-19 & the CARES Act

These are extremely challenging economic times for families, salaried employees, freelancers, and small business owners. Here is a summary of some resources and recently passed legislation like the CARES Act and some Small Business Administration programs. By no means is this an exhaustive explanation.


INCOME TAX FILING + PAYMENT DEADLINES: The federal income tax deadline for filing 2019 tax returns has changed from April 15th to July 15, 2020.

2019 IRA CONTRIBUTION DEADLINE: The deadline for making 2019 IRA and HSA contributions has also been moved to July 15, 2020.

STUDENT LOAN PAYMENTS: The CARES Act suspends payments on federal student loans for 6 months. The act waives any interest on the loans for 6 months as well.

RETIREMENT PLAN WITHDRAWAL FLEXIBILITY: If you need to access retirement savings during this time, the CARES Act provides additional flexibility and reduces/waives some penalties.

IRA + 401(k)/403(b) WITHDRAWALS: Investors of any age can take as much as $100,000 from retirement accounts this year without paying the pre-59 ½ early withdrawal penalty. You have three years to replenish the money into your account, and if you can’t (replenish), the taxes can be paid over three years.

401(k) LOANS: The limit on 401(k) loans has been increased this year from $50,000 to $100,000. The payment dates for any loans due the rest of 2020 will be extended for a year.

IRA REQUIRED MINIMUM DISTRIBUTIONS (RMDs): The CARES Act suspends IRA RMDs for 2020. This is beneficial to Seniors who may not need to spend the money (because 2020 distributions are based on the 12/31/19 value of IRA account, when the market was much higher than it is now). This one-year waiver will allow their investments to remain in their IRAs longer, and prevent them from selling assets at a lower price.


The CARES Act also expands unemployment insurance. Under the provisions in the bill, more people will qualify for benefits and the amounts of weekly benefits will be increased.

Among other things, the Act provides an additional $600 weekly benefit (paid on top of the regular unemployment compensation to which the worker is entitled). There is a waiver of any application-waiting period, so that workers can apply and receive benefits immediately, as well as an extension of the benefits period.

*** For free-lancers, self-employed individuals, consultants, and other “gig-economy” workers: the Act provides unemployment coverage to workers who otherwise would not be eligible for unemployment benefits, or who otherwise would have exhausted their unemployment benefits. ***

Start the application process here:


There are a number of programs through the Small Business Administration that will provide economic and staffing relief for small businesses. Far too many to explain here, but here are two:


For small businesses, self-employed, and independent contractors: Eligible recipients may qualify for a loan up to $10 million determined by 8 weeks of prior average payroll plus an additional 25% of that amount. Loan payments will be deferred for six months.

*** If you maintain your workforce, SBA will forgive the portion of the loan proceeds that are used to cover the first 8 weeks of payroll and certain other expenses following loan origination. ***


The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide temporary relief of lost revenue. The $10,000 loan advance will not have to be repaid.

Please contact me with any questions or to schedule a complimentary consultation.