The law temporarily loosens the rules on hardship distributions from retirement accounts, giving people affected by the crisis access to up to $100,000 of their retirement savings without a 10% penalty. The law doubles the amount 401(k) participants can take in loans from an account for the next six months to the lower of $100,000 or 100% of the account balance. (IRAs don't permit loans.) For retirees, the law suspends for 2020 the mandatory distributions the government requires most to take from tax-deferred 401(k)s and individual retirement accounts starting at either age 70 1/2 or age 72.
The law would allow most Americans with federal student loans to suspend their monthly payments through Sept. 30, 2020, without any interest accruing. It would also enable employers to make tax-exempt contributions toward their workers' student-loan payments.
People who don't itemize their deductions would be able to claim up to $300 for charitable contributions. Businesses get the ability to apply losses from 2018, 2019 or 2020 to past years' profits and claim refunds. Restaurants and retailers would benefit from the fixing of a mistake in the 2017 tax law that curbed their depreciation deductions on renovations.
Employers would be able to defer paying their share of 2020 payroll taxes. They could then make half of those payments in 2021 and the other half in 2022. In addition, the bill creates a new tax credit for retaining employees. Those employees would be able to get a 50% tax credit against up to $10,000 in payroll and health benefits costs per employee. Employees must have experienced a revenue drop or be complying with government shutdown orders and other conditions may apply depending on a business's size.
Corrections & Amplifications
This article was corrected on March 27, 2020 because the original included an incorrect description of a tax credit for retaining employees in the last paragraph. The 50% credit is capped at $10,000 of payroll and health benefits per employee. And to qualify, employers of all sizes either need to be complying with a shutdown order or have experienced a significant drop in revenue.