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COVID-19
COVID-19: The CARES Act Highlights
by First Financial Bank

As circumstances continue to evolve, we want to ensure you have the most up-to-date information and reinforce that we're here for you and ready to help.

First Financial Coronavirus Hardship Relief Program

If you are currently experiencing hardship and need help right now, we’ve developed a program for you.  To learn more, or to be contacted by a First Financial associate to discuss options, fill out the Coronavirus Client Hardship Assistance Form.

If you’ve already filled out this form, thank you for your patience. We’re working hard to reach out to all clients directly within 5 business days of form submission. 

The Coronavirus Aid, Relief and Economic Security (CARES) Act

The Coronavirus Aid, Relief and Economic Security (CARES) Act was passed on March 27. The CARES Act allocates $2 trillion to help people and businesses impacted by the COVID-19 pandemic.

Below are some highlights from The CARES Act, information on how you can access the benefits, and how we can help you: 

Mortgage assistance: Federally backed mortgages may be granted up to an initial 180-day forbearance (delay of your payments), and are eligible for up to another 180 day period for borrowers who continue to experience financial hardship. The forbearance period will be followed by a repayment plan or loan modification depending on the borrowers’ financial situation at that time. The CARES Act also puts a hold on foreclosures as well as provides new guidance to servicers on credit reporting.

What this means for you: If you have a federally backed mortgage, such as one insured by FHA, VA, guaranteed by the Department of Agriculture, or purchased or secured by Freddie Mac or Fannie Mae you may be eligible.

If your mortgage isn’t federally backed, but you have a First Financial Bank mortgage, you may defer your payments for up to 90 days and late fees will be waived during this deferral period. Your payments, including any amount due for escrow, will be moved to the end of the loan. For help please fill out our Coronavirus Client Hardship Assistance Form.

Direct payments: One-time economic impact payments will be distributed automatically to those who qualify to receive a payment, with no action required for most people. However, people who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment.

Economic impact payments will range depending on marital status, number of children and income thresholds. Click here for more information from the IRS’s overview.

What this means for you: You’ll automatically receive this if you qualify. The IRS has stated that in the coming weeks, they plan to develop a web-based portal for individuals to provide their banking information to the IRS online, so that this payment can be directly deposited versus sent as a paper check in the mail. 

Our routing number is 042200910. You will be able to use this information with your account number on the IRS portal.

If you need to deposit a paper check, these can be deposited virtually through Snap Deposit or you can deposit via the drive-thru or ATM at our banking centers.

Charitable donations: The CARES Act provide an above-the-line deduction of up to $300 for those who take the standard deduction for qualified charitable contributions. It also suspends the 60% adjusted gross income (AGI) limitation for 2020 so that individuals may deduct qualified contributions in 2020 up to 100% of their AGI.

What this means for you: If you’ve been looking for another way to help, you may receive additional tax benefits by increasing your charitable contributions.  Please consult your tax advisor to learn more. Our Wealth Advisors* can also provide a customized financial plan for you. To start the discussion or talk through questions around investments or retirement plans for your business contact a wealth advisor.

Use of retirement funds and 401(k) loans: The bill waives the 10% early withdrawal penalty for distributions up to $100,000 for Coronavirus-related purposes, retroactive to January 1, 2020. Withdrawals are still taxed, but taxes are spread over three years, or the taxpayer has the three-year period to roll it back over.

For 401(k) loans, the loan limit increased from $50,000 to $100,000.

What this means for you: If your IRA or 401(k) is with First Financial please feel free to reach out to your Wealth Advisor, plan administrator, or HR department to discuss options and how this choice may impact your financial goals. If your account is with another provider, we recommend that you consult with them. In all cases, we highly recommend you consult with your tax advisor prior to making any decisions.

RMDs suspended: Required Minimum Distributions from IRAs and 401(k) plans are suspended.

What this means for you: If you are in RMD status, the suspension of your RMD can offer some tax relief on the calculated RMD amount. Additionally, since markets have been very volatile, suspending RMDs gives many Americans the ability to leave their investment portfolios alone to recover over the next year.

In addition to the relief these RMD provisions provide, it also opens up planning opportunities. Please contact your Wealth Advisor

Other highlights include:

  • Unemployment: The program provides $250 billion for an extended unemployment insurance program and expands eligibility and offers workers an additional $600 per week for four months, on top of what state programs pay. It also extends benefits through December, 31, 2020 for eligible workers. The deal applies to the self-employed, independent contractors and gig economy workers.
  • Interest Expense Limitation: The interest expense limitations are increased to 50% from 30% for tax years beginning in 2019 or 2020. Taxpayers can also elect to calculate the interest limitation for 2020 using their 2019 adjusted taxable income as the relevant base, which often will be significantly higher.

 

For more information, you can see the full Bill, here.

 

*First Financial Wealth Management, a division of First Financial Bank, provides investment advisory, wealth management and fiduciary services. First Financial Wealth Management does not provide legal, tax, or accounting advice. The products and services made available by First Financial Wealth Management: Are Not Deposits. Are Not FDIC insured. Have No Bank or Federal Government Guarantee. May Lose Value.

First Financial Bank is not affiliated with any third parties mentioned above. Any reference to any person, organization, activity, product, and/or services does not constitute or imply an endorsement. By clicking on a third party link you acknowledge you are leaving www.bankatfirst.com.