The $2 trillion coronavirus financial stimulus that Congress approved last week contains several important provisions that may affect you, your family and your small business. The measure includes a range of financial benefits, including loans and outright payments or tax credits aimed at helping individuals, businesses, healthcare entities and state and local governments.

Key items from the stimulus package include:

One-Time Payments: Individuals who had up to $75,000 in adjusted gross income in 2019 will receive a $1,200 payment, while married couples with an adjusted gross income of up to $150,000 will get $2,400. Taxpayers also will receive $500 for each qualified child under the age of 17. These payments phase out for individuals and couples with higher income levels at a rate of $50 for every additional $1,000 of adjusted gross income.

Recovery Rebates: For 2020 income, a refundable income tax credit of up to $2,400 is available to married couples filing a joint return. All other filers begin with a refundable credit of up to $1,200. The recovery rebates phase out at the same income levels as one-time payments.

Coronavirus-Related Distributions from Retirement Accounts: People affected by COVID-19 may withdraw up to $100,000 in 2020 from a combination of IRAs or employer-sponsored retirement plans such as 401ks in 2020. You can qualify if you, your spouse or a dependent has been diagnosed with COVID-19; if you have been quarantined, furloughed, laid off or had your work hours reduced; are unable to work because you lack childcare as a result of the virus; own a business that closed or operated under reduced hours because of pandemic; or meet other IRS provisions. These distributions are exempt from the traditional 10% early withdrawal penalty. But the amount withdrawn must be repaid over three years. The withdrawals still count as taxable income, but the income can be spread out over three years.

Retirement Account Changes: Required minimum distributions are waived in 2020. If you’ve already taken an RMD from a retirement account this year, you can return the money to your account if you wish. There also are changes to certain requirements related to inheritance of retirement accounts for non-designated beneficiaries such as charities, estates and non-see-through trusts.

Charitable Contributions: There’s a new $300 deduction available for certain charitable donations and the adjusted gross income limits for charitable contributions has been repealed.

Student Loans: Payments are deferred until Sept. 30.

Unemployment Benefits: Regular unemployment compensation is boosted by $600 per week. Benefits now will be available beginning the first week of unemployment. Benefits are expanded for people who previously would not have qualified, such as self-employed individuals and independent contractors.

Small Business Benefits: Certain small businesses can qualify for loans up to $10 million or 2.5 times the average payroll costs, whichever is smaller. The loans can be used to make payroll, pay rent, utilities, mortgage interest, group insurance premiums and other business expenses. The loans, which have a maximum interest rate of 4%, are eligible for full or partial forgiveness. Loan amounts must be spent within eight weeks. To qualify, businesses must maintain the same number of employees. Businesses not receiving loans can qualify for a payroll tax credit. Employers are able to defer payroll taxes through the end of the year until the end of 2021 and 2022.

These are just a summary of the major portions of the stimulus act. As you can imagine, there is all sorts of fine print for each provision. We can provide you with materials that cover each benefit in detail. We’re also happy to field questions about how the stimulus act may apply to you, your family and your small business.

If you have any questions or concerns, contact one of our advisors today.


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*Past performance is not an indicator of future results. This material is not financial advice or an offer to sell any product. The statements contained herein are solely based upon the opinions of Elevage Partners, LLC (“Elevage”). Elevage is a registered investment adviser. More information about the firm can be found in its Form ADV Part 2, which may be requested by calling (877) 922-8243 or visiting http://www.adviserinfo.sec.gov. The information contained herein is derived from sources we believe to be reliable, but which we have not independently verified. Elevage assumes no responsibility for errors, inaccuracies or omissions in this information. Elevage reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. The information provided in this report should not be considered a recommendation to purchase or sell any particular security. There is no assurance that any securities discussed herein will remain in an account’s portfolio at the time you receive. It should not be assumed that any of the securities transactions, holdings or sectors discussed were, or will prove to be profitable, or that the investment recommendations or decisions Elevage makes in the future will be profitable or will equal the investment performance of the securities discussed herein.ELV-17-02

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