What to Know About the CARES Act

The $2+ trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020, to mitigate some of the economic effects of dealing with COVID-19. From direct payments to loans, both individuals and businesses have many questions about how the CARES Act will affect them.

So, what does this emergency fiscal stimulus package really mean for you? In this article, we break down some of the questions you may have surrounding the key provisions.

What do I really need to know about the CARES Act?

The key provisions of the act are as follows:

Direct Payments for Individuals

The majority of Americans will receive a check in the amount of $1,200 for individuals, $2,400 for those who file jointly, and an additional $500 per child. Your payment amount is based on your 2019 tax return; if you have not yet filed your taxes, the amount will depend on your 2018 return. The direct payment amount will be lower for those who make more than $75,000 as an individual, $150,000 jointly, or $112,500 for heads of household. As your annual income increases beyond these thresholds, the amount of your direct payment will also decrease, possibly down to zero.

Small Businesses Loans

Many small businesses have fully or partially closed until further notice, due to the COVID-19 lockdown, which has caused a decline in gross receipts by more than 50% for most. Such businesses are eligible for a refundable credit against payroll taxes that equals 50% of qualified wages paid to employees. The credit is limited to $10,000 of wages per employee (depending on the number of employees) from March 13 through December 31 and must be reduced by any credits claimed under the Families First Coronavirus Response Act.

Employee Protection for Small Businesses

The CARES Act provides the Payroll Protection Program, which guarantees payroll loans for small businesses with 500 employees or fewer. Under this plan, small business owners can borrow up to $10 million with up to a 4% interest rate, as long as certain conditions are met. This program also applies to sole proprietors, independent contractors, and others who are defined as self-employed. In addition to payroll protection, employers are now required to provide employees with paid sick or family leave if those employees are staying home due to coronavirus-related reasons.

Extended Tax Deadline

The IRS has extended the tax filing and payment deadline from April 15, 2020, to July 15, 2020. Additionally, if you are paying estimated tax payments, the due date for the first payment is delayed, along with the annual tax deadline. The remaining payments are due as usual on June 15, September 15, and January 15.

Retirement Plan Distributions

The CARES Act temporarily suspends required minimum distributions for IRAs and 401(k) plans in 2020. You will also not be charged the 10% early withdrawal penalty for distributions of up to $100,000 that are related to coronavirus relief. If you have already taken a distribution for 2020, you can inquire about returning the funds to the account or rolling it over, with the exception of distributions taken from a beneficiary IRA.

Increased Unemployment Benefits

If you file for unemployment due to COVID-19, you will receive an additional $600 for the first four weeks. These additional benefits also apply to those who are self-employed, furloughed, and gig-economy workers.

Tax Benefits on Charitable Donations

You can include cash donations of up to $300 made to any 501(c)(3) organization on your 2020 tax return even if you don’t itemize deductions. For those who do itemize, you will not be held to the 60% adjusted gross income limitation, meaning that you can deduct up to 100% of your adjusted gross income for 2020 for your cash contributions to 501(c)(3) organizations.

How does the CARES Act directly affect me?

You will likely be affected by the act financially in some way. How the CARES Act affects you, however, depends on your circumstances. The benefits of this act are wide-ranging, as we outlined above, because it’s designed to help as many Americans as possible. You should consult your financial advisor to determine how it will affect you and which benefits you can take advantage of.

What should I do in the meantime?

As funds are projected to be delivered in early April, there’s word on the street in Washington, D.C. regarding a possible next phase of economic relief. Until that speculation is brought to light, though, your trusted advisors at SageSpring Wealth Partners will be monitoring new information as it comes available.

Contact us today if you have specific questions. Our advisors are here to help guide you.

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Jeffrey T. Dobyns


President, SageSpring | Financial Advisor, RJFS 

Jeffrey T. Dobyns

President, SageSpring | Financial Advisor, RJFS

Beyond crunching numbers and investment strategies, at SageSpring, we’re about building relationships. When you encounter Founder & President of SageSpring, Jeff Dobyns, it’s easy to understand why this is at the very heart of who we are as a firm. You won’t find stuffy formalities with Jeff; instead, you can expect to find him sharing a warm smile, communicating a compelling vision, or patiently untangling life’s complex challenges with clients. He believes in truly getting to know clients, understanding their aspirations and priorities, and navigating their financial plans with a tailored, comprehensive approach. Our team members have often been caught taking notes on Jeff’s effortless relationship skills from a distance, and we admire them for striving to learn from one of the best. 

Jeff’s financial expertise and wisdom are the perfect match to his innate people skills. Jeff holds the prestigious CERTIFIED FINANCIAL PLANNERTM certification, Chartered Life Underwriter (CLU®), and Chartered Financial Consultant (ChLU®) designations, and has held executive positions with financial planning firms for more than two decades. 

His dedication extends beyond the office to the boardroom and the local community, where Jeff is passionate about giving back. He serves as Chairman of the Board of Men of Valor, a prison ministry and mentoring program. Jeff also serves on the board of Send Musicians to Prison, which shares hope, healing and restoration with the imprisoned through musicians & artists. Jeff actively supports other initiatives in the community by sitting on the board of The Signatry of Middle Tennessee and the Halftime Institute of Nashville. 

Witnessing his four children, Gracyn, Hunter, Tanner, and Logan, excel on the field is almost just as rewarding, if not more, than celebrating the victories of seeing his clients overcome obstacles and build wealth. Spending weekends boating on the lake, hiking mountain trails, and fishing with his family are the moments Jeff cherishes most. It’s this grounded perspective that reveals the true meaning of wealth for Jeff: not just numbers on a page, but the freedom to create experiences that enrich your life and the lives of those you love. When you choose the Dobyns McMillin Wealth Team, you choose more than financial expertise. You choose a partner who champions your dreams, celebrates your victories, and walks besides you on the path to achieving your unique goals.

**Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER TM, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.