On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security (CARES) Act (the Act) was enacted into law. The Act provides sweeping, record-breaking relief to individuals, small businesses, and others affected by the ongoing coronavirus (COVID-19) emergency. This alert provides an overview of certain relief provided to individuals by the Act. Your PNC team is available to discuss this summary with you, along with your tax and legal advisors to consider how the Act may affect you.
Direct Payments to Taxpayers
The Act provides for current direct paymentspayments to eligible individuals of up to $1,200 per individual (up to $2,400 for taxpayers filing a joint return) plus $500 per qualifying child. A qualifying child is:
- a child of the taxpayer who has not attained age 17,
- who is a citizen or non-citizen resident of the United States,
- who has the same principal place of abode as the taxpayer for more than one-half of such taxable year,
- who has not provided over one-half of such individual’s own support for the calendar year in which the taxable year of the taxpayer begins, and
- who has not filed a joint return (other than only for a claim of refund) with the child’s spouse.
The current payment amount is phased out (but not below zero) by 5% of the amount of a taxpayer’s adjusted gross income (AGI) as exceeds certain amounts: (1) $150,000 in the case of taxpayers who file a joint return, (2) $112,500 in the case of a taxpayer who files as head of household, and (3) $75,000 in the case of any other taxpayer. The table below illustrates the phase-out.
Example of Phase-out of Certain Payment Amounts: Joint Filers (no Children)
Example of Phase-out of Certain Payment Amounts: Individual Filers (no Children)
Source: Act § 2201, adding IRC § 6428(c).
Not eligible to receive a payment are: (1) any nonresident alien individual, (2) any individual with respect to whom a deduction as a dependent is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins, and (3) an estate or trust.
The current direct payment is, in reality, a refundable tax credit paid in advance for an individual’s 2020 tax year, although the Internal Revenue Service (IRS) will determine eligibility based on taxpayers’ 2019 or 2018 income tax returns, or other documents for taxpayers not filing those returns. If the payment exceeds the tax for 2020, it shall be treated as an overpayment of tax, except that no interest shall be paid thereon.
Waiver of Required Minimum Distributions for 2020
Generally, individuals who attained age 70½ in calendar year 2019 and prior years are required to withdraw the required minimum distribution (RMD) from their retirement plans and IRAs each year.
The Act provides that individuals are not required to take an RMD that otherwise would be required to be made in calendar year 2020 from qualified retirement plans, defined contribution plans under Internal Revenue Code (IRC) Section 403(a) or 403(b), and eligible deferred compensation plans under IRC Section 457(b) (excluding those maintained by tax-exempt entities).
Individuals who have taken some or all of an RMD before the Act became law may ask whether such distribution may be returned to the plan or IRA. The statute is silent about this and future guidance by the IRS may be necessary.
Generally, the required beginning date (RBD) for taking an RMD is April 1 of the calendar year following the later of the calendar year in which the employee attains age 72 [age 70½ for taxpayers who attained age 70½ in 2019 or prior years], or the calendar year in which the employee retires. The RBD for a person who attained age 70½ in 2019 is April 1, 2020. If a person who attained age 70½ in 2019 did not take the first RMD in that calendar year, such person is not required to take that RMD by April 1, 2020.
Penalty-Free Early Withdrawals Resulting from the COVID-19 Emergency
An individual may be able to withdraw up to $100,000 in the aggregate from eligible retirement plans as a coronavirus-related distribution. A coronavirus-related distribution is not subject to the 10% early withdrawal penalty. The distribution also is not subject to the 20% mandatory withholding on eligible rollover distributions. Further, unless the taxpayer elects out, the coronavirus-related distributions (for any year) will be included in the taxpayer’s income ratably over three years beginning with the year the coronavirus-related distribution is made, thus spreading out the tax liability for the amount distributed over three years. Additionally, coronavirus-related distributions are not subject to the trustee-to-trustee transfer and withholding requirements.
During the three years after the taxpayer receives a coronavirus-related distribution, the distribution can be repaid to a qualified plan or IRA. For plans that are not IRAs, the aggregate amount repaid may not exceed the aggregate amount of coronavirus-related distribution made from a plan, and must be made by individuals that are eligible to make contributions to a plan.
In that case, the individual coronavirus-related distribution is treated as an eligible rollover distribution and then as a direct trustee to trustee transfer within 60 days of the distribution. For IRAs if the amount is repaid, the original distribution is treated as a distribution that was rolled over within 60 days and as a direct trustee to trustee transfer within 60 days of the distribution.
A “coronavirus-related distribution” means any distribution from an eligible retirement plan up to the $100,000 annual limit made:
- on or after January 1, 2020, and before December 31, 2020; and
- to an individual
- who is diagnosed with the virus SARS–CoV–2 or with coronavirus disease 2019 (COVID–19) by a test approved by the Centers for Disease Control and Prevention,
- whose spouse or dependent is diagnosed with such virus or disease by such a test, or
- who experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury (or the secretary’s delegate).
An employee may self-certify to the administrator of the retirement plan that the employee meets the requirements for a distribution to qualify as coronavirus-related distribution, and the plan administrator may rely on such certification.
Amount Available as Loans Increased
Certain loans to qualified individuals from qualified employer plans (including government plans) are not treated as distributions from the plan. Prior to the Act the amount of any such loan was capped at the lesser of:
- $50,000, reduced by the excess (if any) of (a) the highest outstanding balance of loans from the plan during the 1-year period ending on the day before the date on which such loan was made, over (b) the outstanding balance of loans from the plan on the date on which such loan was made; or
- the greater of (a) one-half of the present value of the non-forfeitable accrued benefit of the employee under the plan, or (b) $10,000.
For a period commencing with the date of the passage of the Act and lasting for 180 days thereafter, the limits described above have effectively been doubled. The amount of any such loan is now capped at the lesser of:
- $100,000, reduced by the excess (if any) of (a) the highest outstanding balance of loans from the plan during the 1-year period ending on the day before the date on which such loan was made, over (b) the outstanding balance of loans from the plan on the date on which such loan was made, or
- the greater of (a) the present value of the non-forfeitable accrued benefit of the employee under the plan, or (b) $10,000.
For purposes of this provision, a qualified individual is an individual:
- who is diagnosed with the virus SARS–CoV–2 or with coronavirus disease 2019 (COVID–19) by a test approved by the Centers for Disease Control and Prevention;
- whose spouse or dependent is diagnosed with such virus or disease by such a test; or
- who experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury (or the Secretary’s delegate).
Plan Loan Repayment Dates Extended
Except with respect to a loan used for the acquisition of a principal residence, loans from employer plans must be repaid within five years. If a qualified individual’s loan due date falls within the period beginning on the date of enactment of the Act and ending on December 31, 2020, then the due date shall be delayed for one year. Of course, loan repayment amounts are adjusted to reflect the later due date.
Enabling Retirement Plans to Act
The Act allows retirement plan sponsors to adopt provisions for coronavirus-related distributions and plan loans based on the Act immediately as long as the plan is amended by the last day of the first plan year beginning on or after January 1, 2022, or such later date as the Secretary of the Treasury (or the secretary’s delegate) may prescribe (or in the case of a governmental plan, the date which is two years after such date).
Deduction for Individuals Who Do Not Itemize
For tax years beginning in 2020, an individual who does not itemize deductions may deduct “above the line” in determining AGI up to $300 of qualified charitable contributions made by such individual during the taxable year. A qualified charitable contribution is a charitable contribution:
- which is made in cash;
- for which a deduction is allowable (without regard percentage limitations for deductibility);
- which is not made to a supporting organization or a donor-advised fund (DAF); and
- is not deductible due to certain increased percentage limitations or as a carry-over from a prior year.
Contribution Limits on Deductibility Suspended for Certain Cash Contributions
An individual taxpayer who makes charitable contributions is permitted to deduct on the taxpayer’s federal income tax return the amount of such contributions limited by the application of certain percentages to the taxpayer’s contribution base. The contribution base is the individual’s AGI (computed without regard to any net operating loss carryback to the taxable year).
The Act suspends the percentage limitations for qualified contributions made in 2020. Pursuant to the Act, qualified contributions are deductible on a taxpayer’s federal income tax return up to the full amount of the taxpayer’s contribution base over the amount of all other charitable contributions allowed. Excess qualified contributions may be carried forward and deducted (subject to limitations) over the next five years.
A qualified contribution is a contribution paid in cash during calendar year 2020 to a charitable organization other than a supporting organization or a DAF for which the taxpayer has elected to apply these rules.
In the case of qualified contributions flowing through to an individual’s return from an entity subject to tax as a partnership or corporation taxed under subchapter S of the IRC, the election is made separately by each individual partner or shareholder.
Contributions of food inventory in the case of any taxpayer other than a C corporation are generally limited to 15% of the taxpayer’s aggregate net income for such taxable year from all trades or businesses from which such contributions were made for such year. The Act increases the limitation to 25% of such aggregate net income.
Employer Payments of Employee Student Loans Excluded from Gross Income
Certain educational assistance up to $5,250 paid by an employer on behalf of an employee is excluded from the employee’s gross income. Payment by an employer in calendar year 2020 of principal or interest on any qualified education loan incurred by the employee for education of the employee, whether paid to the employee or to a lender, is educational assistance and, within applicable limits, may be excluded from the employee’s gross income. No deduction is allowed to the taxpayer with respect to payment of interest on a student loan payment excluded from gross income pursuant to this provision.
Student Loan Forbearance
Payments due on student loans that made pursuant to the William D. Ford Federal Direct Loan Program and the Robert T. Stafford Federal Student Loan Program (that are held by the Department of Education) are suspended through September 30, 2020. No interest will accrue on these loans for the period of the suspension. For purposes of loan forgiveness or rehabilitation programs, during the period of suspension the borrower shall be deemed to have made payment with respect to such loan.
During the period of suspension, the Department of Education shall not report nonpayments to consumer credit reporting agencies and shall treat the loan as if it were paid during such time. Involuntary collection procedures with respect to student loans shall be suspended, including:
- a wage garnishment;
- a reduction of tax refund by amount of debt;
- a reduction of any other federal benefit payment by administrative offset; and
- any other involuntary collection activity by the Secretary of Education.
Commencing on August 1, 2020, the Department of Education shall provide at least six notices by postal mail, telephone, or electronic communication to borrowers indicating when the borrower’s normal payment obligations will resume, and that the borrower has the option to enroll in income-driven repayment, including a brief description of such options.
Credit Reporting and Mortgage Foreclosure Forbearance
If a lender makes an accommodation to a borrower, then to the extent the borrower makes payments in compliance with such accommodation the lender shall:
- report the credit obligation or account as current; or
- if the credit obligation or account was delinquent before the accommodation,
- maintain the delinquent status during the period in which the accommodation is in effect, and
- if the consumer brings the credit obligation or account current during 120 days following the enactment of the Act, report the credit obligation or account as current.
An accommodation includes an agreement to defer one or more payments, make a partial payment, forbear any delinquent amounts, modify a loan or contract, or any other assistance or relief granted to a consumer who is affected by the coronavirus disease 2019 (COVID–19) pandemic during the period beginning on January 31, 2020 and ending on the later of: 120 days after the date of enactment of the Act; or 120 days after the date on which the national emergency concerning the COVID–19 outbreak declared by the president terminates.
The reporting provisions shall not apply with respect to a credit obligation or the account of a consumer that has been charged-off.
During the covered period, a borrower with a federally backed mortgage loan experiencing a financial hardship due directly or indirectly to the COVID–19 emergency may request forbearance on the federally backed mortgage loan, regardless of delinquency status, by submitting a request to the borrower’s servicer and affirming that the borrower is experiencing a financial hardship during the COVID–19 emergency. Federally backed mortgage loans include:
- certain loans insured by the Federal Housing Administration;
- certain loans insured under the National Housing Act;
- certain loans guaranteed under the Housing and Community Development Act of 1992;
- loans guaranteed or insured by the Department of Veterans Affairs;
- loans guaranteed or insured by the Department of Agriculture;
- loans made by the Department of Agriculture; or
- loans purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.
Forbearance on the federally backed mortgage loan, regardless of delinquency status, may be requested by submitting a request to the borrower’s servicer and affirming that the borrower is experiencing a financial hardship during the COVID–19 emergency. Upon a request for forbearance, it shall be granted for up to 180 days, and shall be extended for an additional period of up to 180 days at the request of the borrower (which period the borrower may request be shortened). During a period of forbearance, no fees, penalties, or interest except those scheduled or calculated as if the borrower made all contractual payments on time and in full shall accrue on the borrower’s account.
The loan servicer shall extend forbearance without additional fees and based upon the borrower’s attestation to a financial hardship caused by the COVID–19 emergency (and no other documentation) provided that the borrower’s request for an extension is made during the covered period.
Except with respect to a vacant or abandoned property, a servicer of a federally backed mortgage loan may not initiate any judicial or non-judicial foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction or foreclosure sale for not less than the 60-day period beginning on March 18, 2020.
Expanded Unemployment Compensation
The Act expands unemployment compensation to provide unemployment benefits to those who are unable to work as a direct result of the COVID-19 emergency. The Act also provides enhanced benefits for all workers eligible for unemployment.
The Act also expands unemployment benefits to workers who would not ordinarily be eligible for such benefits: those that are self-employed, seeking part-time employment (if permitted under state law), do not have sufficient work history, or otherwise would not qualify for regular unemployment benefits under state or federal law and become unemployed or cannot find work due to the COVID-19 emergency, including independent contractors.
Covered individuals are those who are not eligible for regular compensation or extended benefits under state or federal law or pandemic emergency unemployment compensation from a state pursuant to an agreement with the Secretary of Labor, including an individual who has exhausted all rights to regular unemployment or extended benefits under state or federal law or pandemic emergency unemployment compensation are unemployed, partially unemployed, or unable to work (as self-certified by the employee) because:
- the individual has been diagnosed with COVID–19 or is experiencing symptoms of COVID–19 and seeking a medical diagnosis;
- a member of the individual’s household has been diagnosed with COVID–19;
- the individual is providing care for a family member or a member of the individual’s household who has been diagnosed with COVID–19;
- a child or other person in the household for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID–19 public health emergency and such school or facility care is required for the individual to work;
- the individual is unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID–19 public health emergency;
- the individual is unable to reach the place of employment because the individual has been advised by a health care provider to self-quarantine due to concerns related to COVID–19;
- the individual was scheduled to commence employment and does not have a job or is unable to reach the job as a direct result of the COVID–19 public health emergency;
- the individual has become the breadwinner or major support for a household because the head of the household has died as a direct result of COVID–19;
- the individual has to quit his or her job as a direct result of COVID–19; or
- the individual’s place of employment is closed as a direct result of the COVID–19 public health emergency.
It is important to note, again, that covered individuals also include an individual who is self-employed, is seeking part-time employment, does not have sufficient work history, or otherwise would not qualify for regular unemployment or extended benefits under state or federal law or pandemic emergency unemployment compensation and meets the self-certified requirements of inability to work due to COVID-19 described above.
Covered individuals will receive benefits for weeks of unemployment, partial unemployment, or inability to work caused by COVID-19 beginning on or after January 27, 2020 and ending on or before December 31, 2020, for as long as the unemployment, partial unemployment or inability to work caused by COVID-19 continues.
The Act also enhances unemployment compensation to include an additional $600 per week (even if this takes the employee above their pre-unemployment earnings level) in states which enter into an agreement with the U.S. Secretary of Labor to provide this additional federal pandemic unemployment compensation, for which the participating state will be fully reimbursed.
It is anticipated that agreements with states will eliminate waiting periods and also provide an additional 13 weeks of eligibility for benefits (39 weeks in total).
While it is likely that employees of nonprofit organizations and religious organizations are covered by the federal expansion of benefits under the Act, further action by state governments will be necessary to determine how states will administer those provisions.
The Act provides funding to support states that develop a “short-time compensation” program for employers that reduce hours in lieu of a layoff (but not for seasonal, temporary, or intermittent employees).
Employees who are able to telework with pay and those who are receiving emergency paid sick leave or FMLA public health emergency leave under the Family First Coronavirus Response Act or are receiving paid leave under an employer plan or state or local law, cannot simultaneously receive unemployment benefits under the Act.
Distributions From Retirement Plans and IRAs FAQ
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136 (the Act), enacted on March 27, 2020, affects the administration of individual retirement accounts (IRAs) and certain qualified plans and deferred compensation plans. Below, we share some frequently asked questions (FAQs) and answers regarding the Act’s effect on retirement account distributions. This information is subject to change based on future guidance from the Treasury Department and Internal Revenue Service (IRS).
Q: Does the CARES Act contain special distribution rules in connection with COVID-19?
A: Yes. Eligible individuals may withdraw up to $100,000 in the aggregate from eligible retirement plans (including IRAs) as a coronavirus-related distribution, on or after January 1, 2020, and before December 31, 2020. Because qualified employer retirement plans, 403(b) plans, and eligible 457(b) plans may choose not to permit coronavirus-related distributions, participants should check with their plan administrator.
Q: Who is an eligible individual, with respect to the special distribution rules as provided in the CARES Act?
A: An eligible individual is an individual:
- who is diagnosed with the virus SARS–CoV–2 or with coronavirus disease 2019 (COVID–19) by a test approved by the Centers for Disease Control and Prevention;
- whose spouse or dependent is diagnosed with such virus or disease by such a test; or
- who experiences adverse financial consequences as a result of (i) being quarantined, being furloughed or laid off, or having work hours reduced due to such virus or disease, (ii) being unable to work due to lack of child care due to such virus or disease, (iii) the closing or reduction of hours of a business owned or operated by the individual due to such virus or disease.
Q: How is a coronavirus-related distribution taxed?
A: A coronavirus-related distribution is subject to ordinary income tax, but is not subject to the Internal Revenue Code 10% early withdrawal penalty if you have not attained age 59½. Unless you elect out, the federal income tax liability attributable to the amount distributed will be spread out ratably over three years.
Q: Can I repay a coronavirus-related distribution?
A: Yes. During the three years after you received a coronavirus-related distribution, the distribution can be repaid and it is treated as a 60-day rollover to any eligible retirement plan or IRA that permits such rollover. The aggregate amount repaid may not exceed the aggregate amount of the coronavirus-related distribution.
If you paid income tax on a portion of the coronavirus-related distribution that you later repaid, you should consult your tax advisor about amending your income tax return for the year in which the tax was paid to seek a refund (subject to time limitations).
Required Minimum Distributions (RMDs)
Q: Participants in certain retirement plans do not have to take an RMD for 2020. Is my plan covered by this rule?
A: RMDs are waived for calendar year 2020 from the following types of plans:
- individual retirement plans (for example, traditional and “inherited” traditional IRAs and “inherited” Roth IRAs);
- employer-sponsored defined contribution plans such as 401(k) plans, Roth 401(k) plans, stock bonus plans, and profit sharing plans;
- qualified retirement annuities for certain employees of public schools, employees of certain charitable organizations, and certain ministers; and
- deferred compensation plans of state and local governments and tax-exempt organizations, but only if the employer is a state, political subdivision of a state, and any agency or instrumentality of a state or political subdivision of a state.
Q: Are all RMDs from plans described in Question 5 covered by the Act?
A: Yes. If you are a participant in a plan covered by the Act you are not required to take an RMD in 2020. The waiver includes RMDs that would have been required during your lifetime because you have passed your required beginning date (RBD) and RMDs payable to you as the deceased participant’s or IRA owner’s beneficiary.
Q: What if I turned 70½ in 2019, do I have to take an RMD in 2020?
A: No. If you turned 70½ in 2019, your RBD is April 1, 2020. If you did not take your RMD in 2019, then although you would have been required to take your 2019 RMD by April 1, 2020, and your 2020 RMD by December 31, 2020, you do not need to take either RMD in 2020.
Q: Are there payments from plans described in the Act that must still be paid in 2020?
A: Yes. If you are receiving payments from a qualified retirement plan as part of a series of substantially equal periodic payments, those payments are not waived for 2020, because they are not classified as RMDs.
Q: I took some (or all) of my RMD for 2020 before the Act became law. Can I put it back?
A: It depends. The rules are different with respect to distributions from qualified plans and IRAs.
From a Qualified Plan:
Except for distributions made on or after February 1 through May 15, 2020, if you are within 60 days of receiving the distribution:
If the qualified plan allows contributions to the plan, you may return the distribution to the plan within 60 days of receiving it. If the qualified plan does not allow for contributions, you may contribute the distribution to a traditional IRA. Each separate distribution must be contributed to a qualified plan or traditional IRA within 60 days after the date of the distribution.
Distributions made on or after February 1, 2020, through May 15, 2020, can now be rolled over to a qualified plan or IRA by July 15, 2020.
If you are beyond the 60-day (or extended) deadline:
If the plan allows for such rollovers, and if you have met the qualifications at the time of the distribution, you may be able to characterize a pre-Act distribution in 2020 as a coronavirus-related distribution and repay it pursuant to the provisions of the Act.
From an IRA:
If you are within 60 days of receiving the distribution:
Except for distributions made on or after February 1 through May 15, 2020, distributions taken in 2020 can be added back into an IRA within 60 days of the distribution in a so-called “indirect rollover” if you have not made another indirect rollover in the past 12 months. This one-per-12-month restriction does not apply for rollovers from IRAs to qualified plans or from qualified plans to IRAs. Accordingly, if you are also a participant in an employer-sponsored qualified plan and can make rollovers to that plan, if the once-per-12-month rule prevents you from re-contributing the distribution to an IRA, you may be able to roll it to your qualified plan.
Note that IRS did not change any other rules, so the one-per-12-month limitation on 60-day (indirect) rollovers between IRAs still applies.
If you received a distribution from an inherited IRA, unless you are the surviving spouse of the deceased participant, you may not return that distribution to the IRA (or roll it over to another IRA).
Additionally, the same property that was distributed must be re-contributed; cash must go back as cash. If other property was received, the same property must be returned.
If you are beyond the 60-day (or extended) deadline or barred by the once-per-12-month rule:
If you received a distribution from your IRA and the 60-day deadline for making an indirect rollover has passed, you may be able to characterize a pre-Act distribution in 2020 as a coronavirus-related distribution and repay it pursuant to the provisions of the Act.
Q: If I received a non-coronavirus-related distribution in 2020, do I have to put the whole amount back to qualify it as a repayment?
A: No. If the distribution was from a qualified plan, then the maximum amount that can be rolled over cannot exceed the portion of the distribution that would have been includible in gross income.
If the distribution was from an IRA, then partial rollovers are permitted. If the amount distributed is paid into an eligible retirement plan, the maximum amount may not exceed the portion of the amount received which is includible in gross income.
Q: Tax was withheld from a non-coronavirus-related distribution. What happens to that amount?
A: The tax withheld is treated as a distribution to you from the plan. Because you can’t rollover that amount, it will be subject to tax as a distribution.
Any part of a distribution that is not actually rolled over is subject to income tax. The amount of a distribution that is withheld to pay tax is included in your income. If tax is withheld from a distribution and you want to roll over an amount equal to the full amount of the distribution, then you must use other funds to replace the amount withheld.
You may be eligible to receive a refund of the tax withheld when your return is filed for the year in which you received the distribution. You could also adjust your income tax withholding or quarterly estimated tax payments to take into account the amount withheld. You should seek the advice of your tax advisors.
Q: I would like to roll over my employer-sponsored plan into an IRA. If I do that in 2020 and I have passed my RBD, must I receive an RMD before the rollover?
A: RMDs generally are not eligible for rollover treatment. However, because RMDs are waived for 2020, you should be able to rollover your entire qualified plan to an IRA. The reporting, trustee-to-trustee transfer, and withholding rules apply to the entire amount, including to that portion of the distribution which would have been an RMD were the RMD rules not suspended for 2020.
Qualified Charitable Distributions (QCDs)
Q: Can I still make a QCD in 2020?
A: Even though the requirement to take an RMD in 2020 is suspended, if you meet the normal requirements for making a QCD, you may make a QCD in 2020. QCDs are not premised upon the RMD (even though they are applied against the RMD) but are available to be made once an individual attains age 70½. Although there is no RMD for 2020, the other main benefit is still available; specifically, the QCD amount (up to $100,000 annually) is not included in gross income.
Your PNC team is here and ready to work with you and your advisors to help guide you through how the CARES Act may affect your overall long-term plan.
For more information, please contact your PNC advisor.