COVID-19 has created unprecedented challenges for our world. The way we live life and do business is vastly different from just a few weeks ago. To fight the resulting economic disruption, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was recently signed into law to help American workers, small businesses, and industries. In addition, the Families First Coronavirus Response Act (FFCRA) amends and expands certain provisions of the Family and Medical Leave Act (FMLA).
If you need guidance on your specific situation, you may contact your United Benefits Advisor or our Retirement Specialist Hotline. We have retirement consultants available to take your calls Monday through Friday from 9:30am to 6pm EST.
- One-time payment of $1,200 per person if your adjusted gross income is under $75K for single or $150K for married. Extra $500 per dependent child. Based on your 2018 or 2019 tax return. Check here for more info as available from the IRS: https://www.irs.gov/coronavirus
- Unemployment benefits extended to independent contractors, self-employed and part-time employees and increased up to an additional $600/week more than what your state normally provides. Check with your specific state system for more details.
-Required Minimum Distributions (RMDs) suspended for 2020. If you took your RMD for 2020 already, you may want to discuss the potential benefits of returning the RMD to your IRA.
-Relief for those paying back retirement plan loans: If you have loans, you can call your plan administrator if you want to suspend your loan payments for up to a year. To be eligible, you must be affected by the coronavirus.
-10% early withdrawal penalty from retirement accounts for COVID-19 related expenses waived. This usually applies to people under age 59 ½. Note that income taxes are still due on any withdrawals
-COVID-19 related withdrawals available: Special withdrawals will be permitted for those affected by the coronavirus.
-Plan loan limits doubled: The law allows plans that offer loans to double the amount that can be borrowed to $100,000 or 100% of the vested account balance, whichever is less.
-Deferral of federal student loan payments until 9/30/2020
-Special SBA Programs available through EIDL & PPP: Small business loans (1-500 employees) that may be partially forgiven if used for payroll, rent, mortgage payments and utilities. All small business owners should be reviewing these loans. Click here for more info: Application/Eligibility: https://covid19relief.sba.gov/#/
For specifics on the impact to TSP reference these links:
Link to RMD Plan News item:
https://www.tsp.gov/whatsnew/Content/index.html#rmdchanges
RMD changes page:
https://www.tsp.gov/whatsnew/Content/coronavirus/rmd-changes.html
Link to Covid portal page:
https://www.tsp.gov/whatsnew/Content/coronavirus/index.html
United Benefits and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.