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What You Need to Know About the CARES Act

  • April 13, 2020
  • By Erin Palmer

    Erin Palmer

    Content Marketing Specialist

    Erin Palmer is a content marketing specialist for Suncoast Credit Union. She has written articles for numerous publications and websites, including the Chicago Tribune and Huffington Post. Erin is happiest when curled up with a book, trying a new restaurant or playing with her dogs.

    We’d love to hear your thoughts about the blog! Email us and share what you think.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was created to help Americans impacted by COVID-19.  Since the CARES Act will provide $2 trillion in relief, it has implications for many people.

Here is what you should know about the CARES Act:

Stimulus Check Information

Part of the CARES Act provides Americans with a one-time payment of up to $1,200 for individuals or $2,400 for married couples. There is also an additional $500 per child under 17 years old.

If you have already filed your 2019 tax returns, your payment will be based on your 2019 information. If you haven’t filed your 2019 taxes yet, your payment will be based on your 2018 information.

Your stimulus check amount is based on your annual earnings. Individuals who made more than $75,000 or couples who made more than $150,000 will receive a reduced payment. People who made more than $99,000 as an individual (or $198,000 as a couple) will not receive a stimulus check.

Most people will not need to take action to receive their payment. You can find the latest information and answers to your frequently asked questions about stimulus payments by visiting the IRS website.

Business Owner Relief

The CARE Act also allocates $500 billion to help businesses with things like loans, loan guarantees or investments. From the Paycheck Protection Program to help cover the cost of retaining employees to Economic Injury Disaster Loans, there are a number of resources available to help businesses through this trying time.

Check out The Small Business Owner’s Guide to the CARES Act for more information about business owner relief.

Some Distributions can be Waived and Minimum Required Distributions are Suspended

The CARES Act gives people with inherited 401(k)s or Individual Retirement Accounts (IRAs) the option to suspend distributions in 2020. Required distributions don't apply to individuals with Roth IRAs, however, they do apply to investors with inherited Roth accounts.

Minimum required distributions that people usually must take from their 401(k)s and IRAs are also suspended for 2020.

Waived Withdrawal Penalties

Retirement plans and IRAs typically have withdrawal penalties for people who take out money before age 59½. However, the CARES Act temporarily waives the 10% early withdrawal penalty for 2020 and allows the account holder to withdraw up to $100,000 from their retirement plan or IRA without incurring the penalty. However, you will still owe the tax on these funds.

Help Is Here If You Need It

COVID-19 has brought unprecedented new challenges to our communities, but help is available.

For information about Coronavirus Tax Relief and Economic Impact Payments, visit the irs.gov/coronavirus.

For information about how Suncoast is helping members, visit our emergency page.

For information about whether these special 2020 distribution rules are appropriate for your situation, please contact Suncoast Trust & Investment Services at 866.300.9382 or STIS@suncoastcreditunion.com.

This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Under the CARES act, an accountholder who already took a 2020 distribution has up to 60 days to return the distribution without owing taxes on it. This material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Under the SECURE Act, in most circumstances, once you reach age 72, you must begin taking required minimum distributions from a Traditional Individual Retirement Account (IRA). Withdrawals from Traditional IRAs are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. You may continue to contribute to a Traditional IRA past age 70½ under the SECURE Act, as long as you meet the earned-income requirement.

Accountholders can always withdraw more. But if they take less than the minimum required, they could be subject to a 50% penalty on the amount they should have withdrawn – except for 2020.

1 - CNBC.com, March 25, 2020.
2 - The Wall Street Journal, March 25, 2020.
3 - The Wall Street Journal, March 25, 2020.
4 - The Wall Street Journal, March 25, 2020. 

Suncoast Trust & Investment Services is a marketing name used by Suncoast Credit Union. Representatives are registered, securities sold, advisory services offered through CUNA Brokerage Services, Inc., member FINRA/SIPC, a registered broker/dealer and investment advisor, which is not an affiliate of the credit union. Trust services offered through MEMBERS Trust Company, a federal thrift regulated by the Office of the Comptroller of the Currency. CBSI and MTC are under contract with financial institution to make their services available. Not NCUA Insured, No Financial Institution Guarantee, May Lose Value. Not a Deposit of Any Financial Institution.


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