CARES Act

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What is the CARES Act and how does it affect me?

Coronavirus Aid, Relief and Economic Security Act (CARES Act) was enacted on Friday, March 27, 2020. The CARES Act provides aid and assistance to individuals and business as the country deals with the coronavirus pandemic. This over $2 Trillion economic relief package is designed to help individuals, families, business, nonprofits and healthcare workers and providers. There are other changes that are outlined in the CARES Act, but we are focusing on retirement and annuity account related questions.

Below are high-level FAQs that provide an initial overview of some of the key changes outlined in the Act. For in-depth details regarding the CARES Act, click here. As always, you should consult with your personal tax advisor regarding your own situation.

What impact does the CARES Act have on retirement accounts?

The CARES Act includes several provisions that make temporary changes to the federal laws governing retirement accounts:

  • Waiving all Required Minimum Distributions (RMDs) from IRAs (including inherited IRAs) and qualified annuity retirement saving plans in 2020
  • Penalty-free withdrawals up to $100,00 per person for qualified individuals* from IRAs and qualified annuities, including those under age 59 1/2 and who are normally subject to a 10% penalty. These withdrawals are eligible for flexible taxation and repayment options not generally available for retirement savings distributions. Contact your tax advisor for more information on the flexible taxation.

*A qualified individual is someone who has been diagnosed with COVID-19, is the spouse or dependent of someone who was diagnosed, or has had adverse financial consequences as a result of the COVID-19 pandemic.

How does the CARES Act impact my RMDs?
How do I waive my 2020 RMD?
Will this affect my 2021 RMD?
I already took my RMD for 2020. Is there a way to put the money back in?
Does the CARES Act impact non-qualified deferred annuities as it does for qualified retirement accounts (IRAs)?

During these challenging times, we want you to know that Catholic Financial Life is Always With You. If you are affected by COVID-19, have questions about the CARES Act or are having difficulty making payments related to your Catholic Financial Life policy, please contact us at 1‑800‑927‑2547.

 

Disclosure: Catholic Financial Life does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Catholic Financial Life cannot guarantee that the information herein is accurate, complete, or timely. Catholic Financial Life makes no warranties regarding such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.

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