What is the CARES Act? A brief overview
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law by President Trump on March 27, 2020. Its goal is to provide relief for individuals and businesses negatively impacted by COVID-19.
The following is a brief overview to help you understand some of the benefits provided by the CARES Act, how to access these benefits, and how UMB can help.
What benefits does the CARES Act provide for individuals?
|Direct Payment to Taxpayers|
|Tax credits distributed as checks or direct deposit:
||No action is needed for qualified individuals to receive this benefit.
If you have a UMB bank account on file with the IRS (for direct deposit of tax refunds or Social Security benefits), you will likely receive your payment electronically within a month. UMB online and mobile users with deposit alerts activated will be immediately notified of the deposit.
If you do not have an account on file with the IRS, you will most likely receive a paper check in the mail. You can deposit that check at our branches and ATMs or in the convenience of your own home using the UMB mobile app.
|Mortgage lenders and servicers will be allowed to provide up to 180 days of forbearance (payment deferral) on federally-backed loans for customers experiencing hardship related to COVID-19.||If you are experiencing hardship‡ associated with COVID-19 and need help with your mortgage payments, contact us at 800.821.5184 to learn more about the available programs.
If you already applied for forbearance on your mortgage, no further action is needed. UMB will contact you to discuss your options before your initial 90-day forbearance expires.
|Expanded unemployment benefits:
||Contact your state unemployment office directly. Contact information can be found on the U.S. Department of Labor website‡ (select your state, and then the second link “Apply for Unemployment Benefits”)|
|Allowance of Partial Above the Line Deduction for Charitable Contributions|
||Contact your UMB advisor to discuss your planning options.|
How does the CARES Act impact my IRA or 401(k)?
|Retirement Savings Access Assistance|
|The federal government is waiving penalties and making other accommodations for 2020 for those who need to access retirement savings early:
||It is important to remember that premature withdrawals may not be in your best interest and should be considered only as a last resort, not a first choice. To find out whether you qualify for some or all of these benefits and to discuss which are best for you, contact your advisor at UMB.|
|The loan limit is increased from $50,000 to $100,000.||Contact your UMB advisor to learn more.|
|RMDs Suspended for 2020|
|Required minimum distributions (RMDs) from IRAs and 401(k) plans (at age 72) are suspended.
RMDs are suspended for everyone – no 2020 RMDs for IRA beneficiaries and plan beneficiaries.
|No action is needed for individuals to receive this benefit.
However, if your account is set up for automated distributions, you should contact your UMB advisor to discuss how best to proceed with these options.
If you have already taken an RMD in 2020, you may have an opportunity to roll it back if it has been less than 60 days since the distribution. Contact your UMB advisor to learn more about your options.
What benefits does the CARES Act provide for my business?
|Enhancements to the SBA program|
|Expanded SBA benefits to enable more companies to qualify for larger loan amounts at more favorable terms.||Visit our web page to learn more or contact your relationship manager or your local UMB branch to discuss how UMB can help you take advantage of this program.|
|Multiple provisions to provide tax relief to businesses.||Contact your tax advisor to learn more.|
|Modification of Charitable Contribution Limit for 2020|
|Increases the limitation on charitable contribution deductions.
For corporations, the “10% of taxable income” limitation is increased to 25% of taxable income for the 2020 year.
|Contact your tax advisor to learn more.|
For more information on UMB’s COVID-19 response, visit the following resources:
Stay informed on industry trends and noteworthy company news by visiting umb.com, which is updated weekly for timely viewing. Follow UMB on LinkedIn‡, Facebook‡ and Twitter‡ to see regular updates about our company, people and timely financial perspectives.
When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.
UMB Financial Corporation