New Legislation:
What You Should Know

A lot has happened in recent regulatory changes. This is Colton Groome's Summary of Key and Potentially Actionable Provisions of the CARES, FFCRA, and SECURE Acts.

1. CARES (Coronavirus Aid, Relief, an Economic Security) Act:

  • Passed into law on March 27, 2020
  • 880 pages long
  • Provides economic support to businesses to remain viable and retain employees. Enhances unemployment benefits, and provides support to the health care sysetm in the fight against the Coronavirus.

2. FFCRA (Families First Coronavirus Response)Act:

  • Passed into law on March 18, 2020
  • 44 pages long
  • Appropriates funds for Coronavirus preparedness and response, provides emergency family and medical leaves, and emergency unemployment insurance benefits.

3. SECURE (Setting Every Community Up for Retirement Enhancement) Act:

  • Passed into law on December 20, 2019
  • 124 pages long
  • Amends the Internal Revenue Code to "encourage retirement savings"

Each of these pieces of legislation is broad and far-reaching. Some are also historic. Covering all aspects of each legislative act is simply not possible. However, the following are what Colton Groome and Company feels are key elements, with subject matter grouped by demographic groups in hopes of helping you pinpoint how this legislation may be most relevant to you. Note, each bullet point below is linked to its source legislation ((1), (2) or (3) as identified above).

If you have questions, reach out to your Colton Groome Advisor to discuss how this legislation impacts you: (828) 252-1816.

Workers or Recently Furloughed (or laid-off):

  • (1) Non-Taxable Stimulus payments to individuals and married couples who have reported adjusted gross incomes less than $75,000 (individuals) or $198,000 (married couples), ranging from $1,200 (individuals) to $2,400 (married couples), with additional payments of $500 per dependent. Payments are expected to be received between April 9, 2020 and December 31, 2020.
    • NEXT STEP: For most people, no action is required, payments will be automatically sent.
  • (1) If you are unemployed, partially unemployed or cannot work for various reasons due to COVID-related reasons, you might now qualify for unemployment benefits. The bill provides a wide expansion of qualifiers to include those self-employed and part-time workers. The bill adds another 13 weeks of unemployment benefits to the number that each state allows. It also pays $600/week for up to 4 months, covering unemployment weeks through July 31, 2020. The state of North Carolina currently allows a weekly maximum benefit of $350/week.
  • (1) Taxpayers younger than 59 1/2 who wish to take Coronvirus-related distributions of up to $100,000 from Individual Retirement Accounts (IRA's) and/or employer-sponsored Defined Contribution Plan accounts (401(k), 403(b) or 457(b)), will not receive IRS 10% early withdrawal penalties.  The withdrawals can be repaid over a 3-year period, and withdrawals not repaid will be taxed over a 3-year period.  To qualify for this provision, an individual must have been affected directly (such as themselves or a family member diagnosed) or indirectly (such as financial hardship due to reduced hours, layoffs, etc.) by COVID-19.
    • NEXT STEP: Consult your IRA Custodian and/or employer's plan administrator to explore options. Note, this is a voluntary option that employers/plan sponsors may not elect to offer.
  • (1) The 2019 Tax Year IRA/Roth Contribution Deadline has been been extended to July 15, 2020.
  • (2) Employees can receive up to 80 hours of paid sick leave and expanded paid childcare leave when employees' children's school are closed, or childcare providers are unavailable.
    • NEXT STEP: Consult your employer.
  • (3) There is now no age limit on when one can contribute to an IRA/Roth/Defined Contribution Plan; one need only have earned income to do so.
    • NEXT STEP: Consult your Colton Groome Advisor or CPA (or tax advisor) if you want to discuss making an IRA contribution.
  • (3) One can make penalty-free (still income taxable, however) withdrawals from a retirement plan(s) up to $5,000/year when used for childbirth or adoption expenses.
    • NEXT STEP: Consult your CPA (tax advisor) or your employer's retirement plan administrator.

Professionals and Business Owners:

  • (1) Paycheck Protection Program is a federally-guaranteed small business (500 or fewer employees), forgivable loan, administered through the Small Business Administration's 7(a) program. Loan funds can be used for payroll, paid sick, medical or family leave, group health care benefit costs, mortgage or rent, and/or utilities or other debt payments. This new loan can be forgiven to the extent the proceeds are spent on payroll, rent, utilities, and prior debt interest during the first 8 weeks following closing on a loan.
  • (1) Employers who maintain their employees during the COVID crisis may be eligible for a payroll tax credit: Per employee, there is allowance for a 50% credit to offset the employer’s Social Security portion, up to $10,000 of the employee’s qualified wages. For employers with more than 100 full-time employees, qualified wages are wages paid when they are not providing services due to the COVID-19. For eligible employers with fewer than 100 full-time employees, all employee wages qualify for this credit.  Payroll taxes are extended in this bill, including the employer portion of self-employment taxes. The tax may be paid over two years – half paid by December 31, 2021 and the remaining portion by December 31, 2022. This includes corporate payroll taxes.
    • NEXT STEP: Consult your CPA or tax advisor to see if your business qualifies.
  • (1) Defined benefit plan (401(k)/403(b)/457(b)) sponsors may postpone minimum funding contributions (including quarterly contributions) until January 1, 2021 (postponed contributions will have to include interest).
  • (1) If you are a physician or medical student, the CARES Act provides specific benefits possibly available to you.
  • (2) To help employers fund FFCRA-mandated sick/childcare leave costs, FFCRA created payroll tax credits. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under FFCRA. The credits are designed to fully cover the costs of paying the leave benefits, as well as providing and maintaining group health plan coverage for the eligible employee during the leave period. Self-employed individuals are also eligible for equivalent credits. Instead of businesses having to apply for the credit and wait for funds to be paid to them, they are permitted to keep certain funds withheld from employee compensation and reduce the amount of their own matching payroll tax remittance. Specifically, the employer can retain withheld federal income taxes, the employee’s share of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes applying to all employees.
    • NEXT STEP: Consult your CPA or tax advisor to see if your business qualifies.
  • (3) The SECURE Act provides a number of tax incentives to small employers (generally up to 100 employees) to start a retirement plan.


  • (1) 2020 Required Minimum Distributions (“RMD’s”) from IRA’s/401(k)’s are waived. Also, RMD’s for 2020 that have already been taken, are eligible to be rolled over (returned to the account) if done so within 60 days of the date of the original distribution date.
    • NEXT STEP: If you are currently receiving such distributions and do not need, or want the income this year, or, if you wish to return distributions already received, contact your Colton Groome Advisor. If the IRA at issue is held-away, contact the IRA Custodian.
  • (3) Those born after July 1, 1949, are eligible to delay commencing IRA/401(k) RMD's until the year one turns 72.

General Information:

  • (1) Tax Returns: The April 15 federal income filing and payment deadline is extended to July 15, 2020. Since the federal government's announcement, many states have followed suit with a similar extension.
    • NEXT STEP: Contact your CPA or tax advisor.
  • (1) Charitable Distributions: The CARES Act suspends the Adjusted Gross Income (AGI) limitations for 2020, for qualifying cash contributions made to public charities. (Private foundations, supporting organizations and donor-advised funds do NOT qualify.) This allows taxpayers who itemize deductions to elect to deduct up to 100% of their AGI remaining after accounting for all other charitable contributions subject to AGI limitations. The Act does not specify that such cash contributions be made for COVID-19 relief efforts. For taxpayers that do not itemize deductions, the Act provides for a new "above-the-line" charitable deduction up to $300.
    • NEXT STEP: Consult with your CPA or tax advisor
  • (1) Coronavirus Testing: All testing and potential vaccines will be covered at no cost to patients.
  • (1) If you, or someone you know is having difficulty making a mortgage payment, a forclosure moratorium or a right to forbearance may be available.
  • (3) New for 529 plans are withdrawals for Qualified Education Loan Repayments. A lifetime limit of $10,000 in funds can be withdrawn to repay the principal and interest owed on the plan beneficiary's qualified education loans. An additional $10,000 may be distributed as a qualified education loan repayment to satisfy outstanding student debt for each of a 529 plan beneficiary's siblings.
    • NEXT STEP: Consult with your CPA or tax advisor
  • (3) "Stretch" provisions for non-spousal beneficiaries or regular IRA's/Roth's/Defined Contribution Plans were completely rewritten.
    • The ability for a non-spouse beneficiary to “stretch” RMD’s over their lifetime, has been replaced with the requirement that a beneficiary deplete the entire IRA/Roth/DCP within 10 years following the year of the account owner’s death. Reviewing the planning implications of this dramatic change will necessarily be on a client-by-client basis, because important assumptions (such as tax rates in the future, for each of the account owner and the beneficiaries) will lead to different planning outcomes.
    • NEXT STEP: Over the coming year, Colton Groome's Advisors will have one-on-one conversations with financial planning clients to explore alternative distribution and beneficiary-naming strategies.

Financial Planning Strategies to Discuss with Your Advisor:

  • Refinance a Mortgage: With interest rates at historic lows, this may be a good time to explore whether a refinance makes sense for your situation.
    • NEXT STEP: Ask your Colton Groome Advisor to help you review your mortgage and/or shop refinance rates. Or, contact your mortgage banker/broker.
  • Tax-Loss Harvesting: With many securities down in value, there may be the opportunity to sell to capture capital losses and offset current year capital gains as well as up to $3,000 of ordinary income.
    • NEXT STEP: Colton Groome automatically implemented this in most client accounts. If your account was one of them, you should have received an email from Matt Donohue on April 1, outlining the impact. If you have taxable accounts held away from Colton Groome, consult your investment advisor.
  • IRA-to-Roth Conversions: With IRA values depressed, converting all or a portion of  an IRA today and paying the ensuing income tax to convert assets to tax-free Roth, may deem beneficial.
  • Gifting Assets that have declined in value due to market conditions to reduce ones estate or generation-skipping taxable estate.
  • Enter into intra-family loans to capitalize on ultra-low Applicable Federal Rates: currently, a properly structured 9+ year loan can be made at 1.44% and not be deemed a gift.

These strategies aren't right for everyone. If you have questions regarding your unique situation, Colton Groome is always here for you. While our physical office is not open, we are operating at full-staff with video and phone conferencing to discuss your specific needs.

The material contained in this commentary is for informational purpose only and is not intended to provide specific advice or recommendations for any individual nor does it take into account the particular investment objectives, financial  situation or needs of individual investors. Further the material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for legal or tax advice. Any tax or legal information contained herein is of a general nature. You should seek specific advice from your tax or legal professional before pursuing any idea contemplated herein. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness.

Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, and Certified Financial Planner™, in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements. 

Horizon Investments, LLC is a separate entity from Valmark Securities Inc. and Colton Groome & Company.

Fee-based Financial Planning and Asset Management Services offered through Colton Groome Financial Advisors, LLC, an SEC Registered Investment Advisor. Securities offered through ValMark Securities, Inc. Member FINRASIPC, 130 Springside Drive, Suite 100, Akron, Ohio 44333-2431, 1-800-765-5201. Colton Groome & Company, and Colton Groome Financial Advisors, LLC are separate entities from Valmark Securities, Inc. Colton Groome & Company is a separate entity from Retirement Plan Advisory Group.