Consumers who fall behind on their debt payments won't necessarily take a hit on their credit reports. The bill requires lenders that allow struggling consumers to defer or skip loan payments to report the borrowers as current on their payments, even if they are not. Most consumers who were behind on their debts before the coronavirus crisis will continue to be reported as delinquent.
The bill requires companies that service federally backed mortgages to grant a forbearance of up to 360 days to borrowers who say they have been harmed by the coronavirus outbreak. Servicers are prohibited from initiating foreclosure and processing foreclosure-related evictions for 60 days beginning March 18. Owners of multifamily properties can request a forbearance of up to 90 days, during which tenants cannot be evicted for nonpayment of rent or other fees.
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 that's aimed at companies that are too large to benefit from the small-business assistance elsewhere in the bill. Those employers would be able to get a tax credit equal to 50% of payroll. That is limited to $10,000 per employee per quarter, and for employers with more than 100 employees, it is available only to those companies and nonprofits that had their businesses limited or closed by government actions.