BREAKING: Congress Passes CARES Act & Waives 2020 IRA RMDs

March 27, 2020

Dear Clients & Friends,


In response to the developing Coronavirus global pandemic, Congress has officially passed (and President Trump signed into law) the Coronavirus Aid, Relief, & Economic Security (CARES) Act.  This $2 trillion emergency fiscal stimulus package is intended to help ease the ongoing impact of the virus on the economy.  Attached please find a graphic of the key provisions within the CARES Act as well as a lengthy summary for those who prefer to know each and every detail.


While the official CARES Act was over 850+ pages, below are some of the key points of the legislation that have immediate impacts on individuals and families:


  • Temporary Waiver of Required Minimum Distributions (RMDs) – for tax year 2020 required minimum distributions (RMDs) from IRAs, inherited IRAs, or inherited Roth IRAs have been waived.  This waiver, in combination with the recent market volatility, creates a unique planning opportunity this year for IRA to Roth conversions and we will be in touch with next steps on this strategy.


  • Cash Stimulus Refunds for Taxpayers – individuals will receive a $1,200 stimulus check ($2,400 for married couples) and $500 for each child under the age of 17.  The income phaseout for taxpayers begins at $75,000 for individuals and $150,000 for married couples.


  • Allowance for a $300 Above-the-Line Charitable Deduction – this provision encourages Americans to contribute to churches and charitable organizations in 2020 by permitting them to deduct up to $300 of cash contributions, even if taking the standard deduction.  Notably, prior to this change charitable donations did not provide a tax benefit for those taxpayers who took the standard deduction.


  • Student Loan Payments Deferred Until September 30th, 2020 – for clients who may have family members who are making payments on outstanding student loan balances these payments may be deferred (as well as the interest accruing on these student loan balances) until September 30th.  However, these individuals must take action proactively by contacting their loan provider to pause payments as they will not stop automatically.


With warm regards,


Brandywine Oak Private Wealth