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Additional Coronavirus Aid, Relief, and Economic Security (CARES) Act Updates
Shared by Strong Valley on April 4, 2020
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Here's a quick look at what's in this article:

The CARES Act will directly or indirectly affect nearly every American. Below we provide some additional insights into a few key aspects of the bill likely to impact most individuals, families, and retirees.

  • Who is affected by the CARES Act?
  • How does this compare to the 2009 stimulus?
  • What do Strong Valley clients need to know?
  • Where can I get more details and information?

Important Disclosure: Content on our website and in our newsletters is for informational purposes only. The information provided may (or may not) directly apply to your situation. We recommend that readers work directly with a professional advisor when making decisions in the context of their specific situation.

Who is affected by the CARES Act?

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, or the "CARES Act," provides relief to individuals, families, small businesses, and major employers.  The bill also puts measures into place designed to help the healthcare industry, as well as other sectors affected by the outbreak of the virus.  With such an expansive bill, it will likely change (hopefully positively) every American, either directly or indirectly.

How does the CARES Act of 2020 compare to the American Recovery and Reinvestment Act of 2009?

The cost of the CARES Act is estimated at roughly two trillion dollars, making it one of the most extensive stimulus packages in history. By comparison, the American Recovery and Reinvestment Act of 2009was estimated at $831 Billion.  The following March 26, 2020, Los Angeles Times article on the topic by Sandhya Kambhampati provides some additional comparisons and breakdown of the deals, which you can view here.

What do Strong Valley clients need to know?

Waiver of Minimum Distribution Rules

An exemption may exist during the calendar year 2020 for many, who would typically be required to take minimum distributions from their retirement plans and accounts.  We encourage our clients to discuss with their Strong Valley advisor, waiver qualifications, and whether this is something of which they should take advantage, within the context of an overall strategy and situation.

Increased Allowances for Charitable Donations

A part of the CARES Act stimulus is designed to encourage giving to charitable organizations during 2020. Significant economic downturns may lead to decreased donations to non-profits, as churches, food pantries, and other organizations become more heavily relied upon.  For those who itemize their deductions, there is no longer a 50% individual limit based on adjusted gross income. For those who do not itemize, cash contributions of up to $300 may be deducted.  And, for corporations, charitable giving limitations increased from 10-percent to 25 percent of taxable income.

Waiver of 10% Early Withdrawal Penalty

After January 1, 2020, withdrawals of up to $100,000 from qualified retirement accounts may be eligible for a waiver of the standard early withdrawal penalty. While withdrawals would still be considered income, the taxes on the distribution can be spread out over three years. Funds can also be redeposited to the account (re-contributed) any time within three years from the date of distribution, without the worry of the typical annual contribution cap limits.   

According to the provision in the bill (now Section 2103), a "coronavirus-related distribution" applies, as one would expect, to any individual (or their spouse) who is diagnosed with COVID-19 "or to" those who "experience financial consequences" related to the virus (i.e., layoffs, reduction of hours, the inability to work, etc.).

Where can I obtain more details?

Summary from the Senate Committee on Finance

Strong Valley has provided a more detailed overview directly from the Senate Committee on Finance, which can be found here. (Please note that some of the section numbers may have changed since the bill was passed and signed.)

Complete Senate Bill S.3548

The full text of the Senate bill, including amendments, can be found online at this link from

Your Strong Valley Advisor

Strong Valley advisors are contacting clients as needed, but if you have any questions or concerns about how the CARES Act may affect your situation, please reach out directly to your advisor or call our main office at 559-384-2900.

Quick Links

Original Full Summary from the Senate Committee on Finance

Los Angeles Times Article comparing the CARES Act vs. the 2009 Stimulus package

The Senate Bill Text

Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results or even estimates of actual returns a client may achieve. This information is designed to provide general information on the subjects covered. Consult your financial professional before making any investment decision. Opinions and estimates offered are subject to change without notice. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. Please see other important disclosures related to

Your turn – What would you like to know about Additional Coronavirus Aid, Relief, and Economic Security (CARES) Act Updates?

Strong Valley wants to provide useful and meaningful information to our clients, to our professional network, and to the broader community of people we serve. We’d love to hear your questions about Additional Coronavirus Aid, Relief, and Economic Security (CARES) Act Updates or about any other topics you care about. You can call our office directly, or use the contact form below to send us your questions and/or suggestions.  And if you found the information helpful or entertaining, we hope you'll share the Strong Valley story with others.

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