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Benefits of the CARES Act for Individuals

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law, creating a $2T stimulus to the U.S. economy to combat the fallout from the COVID-19 global pandemic. It is a massive law with many benefits for American companies and individuals. Some of those benefits have been well publicized, but others have not, and the Private Wealth team at First Business Bank wants to make sure you understand the parts of the bill that may affect you. For in-depth information on tax deadlines, economic impact payments, and IRS guidance please see https://www.irs.gov/coronavirus.

Highlights of the CARES Act


  • Your 2019 tax returns and payments are due July 15th instead of April 15th. This is true at the federal level and for many states, including Wisconsin, Illinois, Missouri, and Kansas. Also, 2020 1st quarter tax estimates are due July 15th instead of April 15th.
  • The IRA contribution deadline for 2019 has been extended as well. You can now make 2019 contributions to IRAs until July 15th instead of the usual April 15th.


  • Each individual qualifies for a $1,200 payment ($2,400 for married couple) and $500 per qualifying child (child, stepchild, foster child, etc. under age 17). These payments have income limitations with phase outs based on your Adjusted Gross Income (AGI).

Individual – phase out begins at AGI of $75,000, and completely phases out at $99,000
Married – phase out begins at AGI of $150,000 and completely phases out at $198,000
Head of Household – phase out begins at AGI of $112,500 and completely phases out at $136,500

  • If you filed a 2018 or 2019 tax return or are a Social Security beneficiary, you are automatically eligible. Others who don’t normally file tax returns are eligible, as well, but will need to file a 2019 tax return to receive payments. College students are not eligible if they are a dependent. Adult dependents are also not eligible. Note – you do NOT have to be unemployed to qualify for these payments.
  • AGI will be based on 2018 tax return (or 2019 tax return if filed already) for the rebate payments to be received in April/May, but ultimately based on 2020 income. Rebates will be sent via direct deposit if you currently use direct deposit for tax refunds. We expect more guidance on how and when the payments will be received.


  • Required Minimum Distributions are no longer required for 2020. This is true for all types of retirement plans, including inherited IRAs (traditional and Roth). There is also no RMD for individuals who had their first RMD in 2019 but delayed until 2020 under the rule that allows you to delay the first RMD until April 1th of the following year. If you already withdrew your RMD before the CARES Act, there doesn’t seem to be a provision for un-doing that, however, you may look to use the 60-day indirect rollover rules to effectively roll the distribution back into the plan.
  • Individuals now qualify for a $100,000 early retirement withdrawal exemption (avoid the 10% penalty) if you have been affected by coronavirus. This applies to people under age 59 ½ who would normally pay a 10% penalty for an early withdrawal, and who are diagnosed with the coronavirus, whose immediate family member contracts the virus, who loses their job or are furloughed, etc. The $100,000 withdrawal can also be taxed over three years or you can pay back to IRA or retirement plan over three years (treated as non-taxable rollovers).
  • The maximum loan amount from qualified employer plans increases from $50,000 to $100,000.


  • You may deduct up to $300 of charitable contributions even if you don’t itemize your deductions (above the line deduction). The beneficiary must be a qualified charity; not eligible for donor advised fund or private operating foundation.
  • There are no income limitations to deductions for cash contributions to qualified charities for 2020 only. Typically, these deduction limits are 60% of AGI for cash donations.
  • Qualified Charitable Distributions (aka QCDs) from IRAs are still allowed up to $100,000 even though there is no RMD for 2020.



Our Private Wealth team at First Business Bank is happy to assist in any way possible. Please do not hesitate to contact us to find out how the CARES Act applies to your unique situation.



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