Good Morning,
Thank you for joining me over coffee today. I must admit that this quarter-end is met with bittersweet feelings as we conclude and reflect upon the end of one of the most turbulent 1st quarters in economic and financial market history. Although we are incredibly proud that our investment process and wealth management techniques enabled our clients to navigate these choppy waters, we are met with somber feelings as the coronavirus has tragically taken many loved ones. And although we are in the midst of unprecedented times, we are passionately working hard to provide our best insights and solutions for our clients. We are committed and honored to be walking this journey with you all side-by-side.

With first-quarter wrapped up, we are working on producing our DelosCA Quarterly Reflection, which discusses the latest thinking happening at the firm. The Quarterly Reflection is designed to communicate our latest developments occurring operationally at Delos Capital Advisors, top of mind financial planning techniques, and our latest assessment and outlook for the economy and financial markets. We look forward to sharing the latest Quarterly Reflection with you all by mid next week.

Over coffee today, in place of our usual economic and financial market chit-chat, given the comprehensive Quarterly Reflection published in a few days, I would like to highlight the recent work done by DelosCA’s Director of Financial Planning, Thomas Keeling.

As you may know, the Federal Government has recently passed a stimulus bill known as the CARES Act, which was enacted to provide monetary relief to individuals, families, and businesses across the United States. Given the complexity of the passed stimulus bill, Thomas has produced a synopsis of the most notable provisions and core components on individuals and families.


What you need to know

President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act Friday, March 27. This $2 trillion stimulus package brings much-needed assistance and hopes to substantially alleviate the extensive financial damage caused by the COVID-19 pandemic. While a few of the main provisions of the almost 900-page legislation (Recovery Rebates and Unemployment Assistance for example) have been highlighted and generalized in the media, the intricacies within them and the multitude of other provisions within the CARES Act may cause confusion. Below I have listed some of the most notable provisions along with their core components specifically related to individuals.

Although the reach and inclusion of the CARES Act is extensive, its multifaceted provisions do have limitations and exclusions. Additionally, there may be assistance available for which individuals are unaware they qualify. Regardless of need for the assistance offered, it is extremely important to understand the impact of the Act affects everyone. We strongly encourage everyone to reach out to us to help understand those potential effects and take the necessary steps to ensure the most optimal outcome.

Recovery Rebates for Individuals

  • Advanced refund of 2020 refundable tax credit
  • Allowable amounts: $1,200 for single filers $2,400 for joint plus $500 per qualifying child
  • Limitations based on Adjust Gross Income Thresholds ($150,000 joint, $112,500 head of household, $75,000 for all others). Reduced (not below zero) by 5% of AGI that exceeds respective threshold.
  • Estimated with 2019 AGI if return has already been filed and 2018 AGI if not and will be reconciled with 2020 AGI. Underpayments will be applied to 2020 return and overpayments will not have to be paid back.
  • Payment to be made “as rapidly as possible” and may be sent electronically to authorized accounts.

Special Rules for Use of Retirement Funds

  • Coronavirus-related distributions from retirement plans up to $100,000
  • Exempt from 10% early withdrawal penalty
  • May be repaid within 3 years
  • Option to spread income inclusion over 3 years
  • Loans limits from qualified plans increased to 100% of vested balance up to $100,000
  • Outstanding loans with payments due in 2020 delayed up to one year

Temporary Waiver of RMD Rules

  • All RMD’s for 2020 eliminated
  • Applies to account owners as well as beneficiaries
  • 2020 excluded in regard to 5-year rule for non-designated beneficiaries
  • Potential to return certain RMD’s already taken for 2020

Charitable Contribution Provisions

  • Partial above the line deduction for qualified charitable contributions for tax years beginning 2020
  • AGI limits for individuals increased to 100% for 2020
  • Excess qualified charitable contributions may be carried forward up to 5 years

Student Loan Provisions

  • Certain employer payments of student loans may be excluded from income
  • Required payments on Federal student loans suspended until September 30, 2020
  • Interest will not accrue during period of suspension
  • Period of suspension still counts toward loan forgiveness programs
  • Involuntary collection of payments suspended including wage garnishment and tax refund reduction

Health Care Provisions

  • Qualified medical expenses expanded to include certain over-the-counter medical products
  • Medicare will cover COVID-19 vaccine at no cost when available
  • Medicare prescriptions drug plans required to allow fills and refills for up to 3-month supply

Unemployment Provisions

  • Pandemic Unemployment Assistance for self-employed and other individuals typically not qualified for regular unemployment
  • Maximum unemployment benefits extended to 39 weeks
  • Temporary full Federal funding for first week of unemployment
  • “Federal Pandemic Unemployment Compensation” of $600 will be added to unemployment payments
  • Incentives for “short-time compensation programs” which help individuals who remain employed collect a percentage of their unemployment to replace some of their income that has been lost due to COVID-19

For more information and to learn how you may be directly impacted by these and other provisions within the CARES Act, please reach out!


Chief Investment Strategist

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