The CARES Act
The CARES Act was officially passed on 3/27/20 and with it brought many changes for 2020. We wanted to highlight key points from 3 of these changes that may affect many of our clients this year. Please contact us to discuss further details and your particular situation.
1- 2019 retirement account contribution deadline extended to 7/15/20 to match the updated IRS tax filing deadline.
2- 2020 retirement account required minimum distributions (RMD’s) are suspended for 2020. You can still take a withdrawal or make Qualified Charitable Distributions if you like. However, they are not required for 2020. Additionally, if you have already taken a 2020 RMD, you can elect to redeposit the distribution into your retirement account, and do so over the next three years.
3- Premature retirement account distributions (those done before the age of 59 1/2) will not have the normal 10% early withdrawal IRS tax penalty if withdrawn in 2020 and due to COVID-19 needs. The usual ordinary income taxes on these distributions can also be elected to be spread out between the 2020-2022 tax years. Additionally, you can repay these distributions into your retirement account over the next three years.
RFC continues to follow measures for the safety of our team and clients:
• Clients are welcome to drop off paperwork or tax related documents using our drop box. The drop box is located left of the door at the front entrance of our building.
• We will continue to be available for appointments by phone and video conference to review your financial goals, investment strategies, and answer any questions you might have.
• We anticipate that this will continue through April 30, 2020, but we will adjust accordingly.
RFC will remain vigilant and are following the recommendations from the World Health Organization, U.S. Centers for Disease Control and Prevention, and local authorities.
RFC Financial Planners