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CARES Act: Will there be a Phase 4?

| July 31, 2020
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With the economy and financial markets flashing mixed signals, it’s no wonder that lawmakers are deadlocked on whether to pass a Phase 4 of the CARES Act.

More than $3 trillion in stimulus has been pushed into the economy since March.1 Critics of a Phase 4 package say the economy needs time to digest an unprecedented amount of federal spending. On the other hand, supporters say more is needed to help 21 million unemployed Americans and the many small businesses that continue to struggle with the pandemic’s impact.2

Here are a few changes being considered in Washington:

  • Another round of stimulus checks (the first round was in Phase 3)3
  • A payroll tax cut, a new idea being considered by the White House4
  • Liability shields for businesses against coronavirus impacts5
  • Workplace safety standards (steps taken by businesses vary widely)6
  • Additional funding for state and local governments (more than one million public-sector employees have been laid off since the outbreak)7

This is a confusing time as proposals can often get mingled with actual updates to existing rules. For example, did you know that the Small Business Administration extended until August 8, 2020, its deadline to apply for the Paycheck Protection Program?8 

Also, Americans who have been adversely affected by the COVID-19 pandemic may now be able to access retirement accounts to help cover daily expenses, penalty-free. Now, in addition to those who have lost their jobs during the COVID-19 pandemic, you may access your retirement funds without being subject to the 10 percent penalty if your income was reduced, or who’ve had the start of a new job delayed.9

The CARES Act is a complex piece of legislation, and the rules governing access to retirement accounts can be tricky to grasp. If you’re considering taking advantage of the CARES Act, let’s connect to discuss your overall financial situation and how you can pursue your goals.

If you have any questions, please reach out. Meanwhile, we’re keeping close tabs on whether a Phase 4 package moves to vote in Congress.

1. Finance.Yahoo.com, July 2, 2020

2. Fortune.com, June 9, 2020

3. Finance.Yahoo.com, July 2, 2020

4. Reuters.com, June 8, 2020

5. NYTimes.com, June 12, 2020

6. The Wall Street Journal, April 12, 2020

7. Finance.Yahoo.com, July 2, 2020

8. CNN.com, June 30, 2020

9. FoxBusiness.com, June 19, 2020

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.

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