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You’ve Taken a Financial Hit During COVID-19. Use These 5 Techniques to Overcome Financial Stress

By | Resources

You’ve Taken a Financial Hit During COVID-19. Use These 5 Techniques to Overcome Financial Stress

Beginning in February and March 2020, America, Canada and Europe locked down cities, closed businesses and halted travel amidst the onset of COVID-19. Six months later, we’re still experiencing the pandemic’s global impact in our communities. A record number of people have applied for unemployment in America since March, and millions are still left jobless, behind on their bills or struggling to make ends meet. If you and your family have been financially hit during the COVID-19 pandemic, here are a few things you can do to help handle and overcome your financial stress.

Tip #1: Make a To-Do List

Sometimes the most effective techniques are the simplest. When it comes to overcoming your financial stress, start by putting your to-do list in writing. Creating a clear list of what’s ahead can help it feel more tangible and doable. If you can, start with the easiest tasks and slowly work through your list, checking things off one by one. With a to-do list in front of you, there’s no need to bear the burden of remembering everything in your head. Starting with a list of tasks can help you more effectively build a plan of action.

Tip #2: Try Talking to Someone

While working with a financial advisor is recommended, it can still help to open up to a family member or friend in the meantime. Keeping everything bottled up and to yourself is only going to escalate your anxiety. If you’re able to, talk it out with someone you trust and be honest. Discussing your problems can ease the burden significantly. Your friend or family member may even have some advice to offer or a financial advisor to recommend.

Tip #3: Review Your Spending Habits

Ignoring the situation may be tempting, but putting your financial obligations off will only make them worse. While some financial issues are more complicated than others, taking stock of your current situation can help build a better understanding of where you are today and what needs to happen. This often starts with adjusting your spending and saving habits. When it comes to addressing your current spending habits, there are a few things you can do right away:

  • List out every income source you currently have
  • Determine your debts (student loans, car payments, credit card debt, etc.)
  • Keep track of all your spending manually or using a phone app
  • Identify potential spending patterns or triggers (when you’re stressed, right after payday, etc.)
  • Determine what changes you can make to your average spending to save more
  • Avoid impulse spending

Tip #4: Make a Plan and Create a Monthly Budget

Creating and tracking a monthly budget is a great way to get in the habit of healthier spending – and healthier spending habits mean less 􀀁nancial stress.
To get started on creating your monthly budget, start by:

  • Listing out recurring expenses such as gas, groceries, utilities, etc.
  • Prioritize contributing to your emergency fund each month
  • Set up automatic payments to avoid late fees or interest
  • Determine where you may be able to cut down on spending (entertainment, clothes, etc.)+

Tip #5: Establish a College Savings Plan

If you have a young one at home, paying for college is likely looming over your head. To ease this large financial burden, take the time now to establish or check up on your 529 plan. This tax-advantaged savings plan is designed to encourage saving for future education costs (such as tuition, room and board, etc.). You and other family members can contribute to the account, which will gain interest over time as you set aside funds to pay for a child or grandchild’s education. Getting your finances in order is no easy feat. Identifying your main stressors and establishing a plan to address them can make a big difference in how you and your family feel about your finances. If you’re feeling lost, confused or overwhelmed, don’t forget to reach out to a trusted financial professional who can help make sense of your current financial situation.

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalites. Please consult legal or tax professionals for specific information regarding your individual situation. THe opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security

4 Yearlong Tax Tips for Retirees

By | Resources

4 Yearlong Tax Tips for Retirees

Whether you’re just easing out of the workforce or you’ve been in retirement for a few years now, making financial moves is critical. If you’re working with an advisor or taking a look at your finances
one central goal during retirement is protecting your wealth from unnecessary taxes.

In many cases, there are ways to avoid owing more taxes – but usually, this requires proactive action beyond tax season. Below we’ll explain four tips you can utilize throughout the year to help minimize your tax obligations in retirement.

Tip #1: Take Your Required Minimum Distributions (RMDs)

An RMD is an amount that must be withdrawn from your retirement account. These required withdrawals begin when you, the retirement plan account owner, reach age 72. The rules apply to employer-sponsored retirement plans, traditional IRA plans and Roth 401(k) accounts, but they don’t apply to Roth IRAs when the account owner is still alive.
Some IRA custodians and retirement plan administrators might find out what your RMD is for you, but the responsibility ultimately falls on you. To find out what your RMD is, the IRS provides l ife expectancy t ables to utilize according to your circumstances. If you do not withdraw the RMD (or the correct amount), the amount not withdrawn will be taxed at 50 percent, which is why it’s critical to take your RMDs and withdraw the correct amount.1

It’s important to note that as part of the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, passed on March 27th, 2020, RMDs are not required for the remainder of 2020.2

Tip #2: Manage Your Income Combinations

As a retiree, a portion of your income will likely come from Social Security. However, not all of your benefits are taxable, and there are ways to minimize or, at times, eliminate taxes on your Social Security benefits.

If half of your Social Security benefits in addition to your other income is higher than the base amount for your status, your benefits will be taxable. By strategically managing all of your income sources (such as pension payments, dividends or part-time jobs), it’s possible to lower the portion of benefits that will be taxed. Rules regarding Social Security income taxes also vary from state to state, so always check with your state regulations to determine the best solution for you.3

Tip #3: Figure Out if You Need to Pay Quarterly Taxes (If Not, You May Decide to do it Anyway)

If you don’t have taxes withheld automatically, you may need to pay estimated tax payments. Individuals who are expected to owe $1,000 or more – or those whose withholding and refundable credits are 1) less than 90 percent of the tax owed or 2) at least 100 percent of the tax on the previous year’s return – must pay estimated tax.

In some cases, you might decide to pay quarterly taxes, even if you are not required to, in an effort to avoid the inconvenience of paying a large sum all at once. If you miss a payment or underpay, you may be charged a penalty.4

Tip #4: If You’re Moving to a New State, Get to Know Its Tax Laws

If you’re relocating to a new state during retirement, consider the impact of the move on your financial situation, as tax laws vary according to the state. For example, some states, like Florida and New Hampshire, don’t tax on income or only tax on dividends and interest.5 On the other hand, they may have higher property taxes. For example, New Hampshire’s property taxes are high compared to the rest of the country.6 In addition to nicer weather or a more serene lifestyle, you might decide to move to a new state in an effort to save on taxes.

In many cases, an individual or couple is working with a fixed amount of wealth to last throughout retirement, which is why taking the right financial steps is essential. By working with an advisor and keeping these four tips in mind during the year, you can make sure you’re not paying more than you need to. When it comes time to finalize gifting to your children or grandchildren, you can further reduce taxes by incorporating other strategies, like charitable giving, into the equation. 7



This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

4 Areas of Your Estate Plan to Review in Light of COVID-19

By | Resources

4 Areas of Your Estate Plan to Review in Light of COVID-19

Although COVID-19 related restrictions are beginning to ease, many people continue to help slow the staying home and self-isolating. There are still unknowns related to the pandemic and how it will play out, undoubtedly keeping us all on edge. Over the past few months, we’ve been forced to face fears of falling ill, losing a job, spending time alone, etc. With these anxieties weighing on your mind, it may feel as though there’s a sudden need to get your affairs in order, just in case.

It never hurts to be prepared in the event that, for instance, you may need to be hospitalized for coronavirus or any other sickness. Thinking about falling ill or not being able to make decisions for yourself can be frightening, but having an estate plan in place can help ease your concerns.

Many people are taking this time at home to update their estate plans, and if you don’t have one in place, there’s no better time to put it together.

Estate Plan Documents That Should Be Reviewed & Updated If Necessary

Individuals over the age of 18 should have some level of estate planning in place. You may be surprised to learn that wills and trusts aren’t the only documents to prioritize. A strong estate plan will include several important documents, such as a living trust, financial powers of attorney, health care powers of attorney and more.1
In light of the current pandemic, two of the most important documents to have up-to-date and on-hand are your medical and financial powers of attorney. For instance, if you’re quarantined in your home, admitted to the hospital or become incapacitated, you’ll need someone to handle your finances or make medical decisions on your behalf. With those in place, it’s a good idea to continue organizing a comprehensive estate plan that includes the following documents.

1. Power of Attorney and Health Care Proxy

A financial power of attorney grants authority to carry on a person’s financial affairs and protect their property by acting on their behalf. This includes the ability to write checks, pay bills, make deposits, purchase or sell assets or sign any tax returns.1

Similarly, a health care power of attorney grants the authority to make health care decisions on your behalf should you become incompetent or incapacitated. If you are over the age of 18 and do not have a health care power of attorney in place, your family members will need to request that the court appoint a
to take on these responsibilities.1

Ensuring that you have named trustworthy and reliable individuals as your powers of attorney is key as you update your estate plan. If your current documents are outdated, implementing new ones should be on the top of your list.

2. Your Will

A last will and testament is a legal document that allows you to direct distributions of your property at the time of your death. A will also allows you to appoint an executor who oversees the distribution of your assets.2 This person will attend to your affairs after you pass, probate your will if necessary and file income and estate tax returns on your behalf. If you have children who are minors, you should also name a guardian for them in the will.

Everyone has assets that must transfer after a person’s death, and without a will, there is no direction as to how and to whom those assets will pass. Distribution of your assets will be handled by the state and the court will decide on the best person to oversee the administration. This is similar to an appointed guardian in that if you don’t appoint one, a court will decide on the best person to fulfill this role.2

3. Living Trust

In general, your trust benefits you while you are alive and may also be beneficial to others, such as your spouse or children. Identifying who will receive assets upon your death may be a detail that needs updating based on your lifestyle and changes that have taken place. Additionally, you’ll want to outline whether your beneficiaries receive your assets outright or perhaps you’ll want to provide them with an income stream instead. If your beneficiaries are young, you may want to consider holding assets for them in a trust until they are old and responsible enough to handle finances themselves.

Appointing a trustee will identify who will step in to manage your affairs without the involvement of the court, avoiding extra time and money associated with probate.3 A trust also affords you privacy regarding the details of your estate since it eliminates the need for probate, which is a public process.

4. Beneiciaries

Another important update you should make to your estate plan is to review beneficiary designations on your life insurance policies, retirement accounts, etc.2 Keep in mind that if you have a joint asset such as a bank account, that will pass to the surviving joint owner. Be sure to name someone you trust to act in your best interest should the time come for them to be responsible for your assets.

Due to stay-at-home orders and social distancing practices, it may be more difficult to meet with your or notary in-person to prepare or update your documents. There are template websites online

that allow you to create documents from scratch, and some states have even suspended various statutes to let people appear before a notary public via videoconference.4 While some documents can be finalized virtually, wills need to be signed in front of witnesses, which means this step to finalizing your documents may need to be done in person.

While you have the time, you should start reviewing your estate plan and making any adjustments with the appropriate professionals as needed. Making necessary and important changes now will likely benefit you and your family in the future.


This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

4 Things to Know Before Adding Your Teen to Your Car Insurance

By | Resources

4 Things to Know Before Adding Your Teen to Your Car Insurance

For teenagers, getting that first car is a milestone – it serves as a symbol of maturity and independence. ss, most teens aren’t in the financial position to pay their own car insurance. But with teenagers aged 16-19 being the most likely to damage their cars, going uninsured isn’t an option.If your teen is approaching driving age, you may be preparing to add them to your car insurance. It’s important to be aware of these four things before you do so.

1. Your Rates Will Increase

Adding a teen to your policy will inevitably increase your rates. It doesn’t matter how good of a driver they are, teens are the most inexperienced drivers and, therefore, the riskiest to insure. While the average annual cost of auto insurance for a 25-year-old is $3,207, the same is $7,179 for an 18-year-old driver.2 However, it’s typically still cheaper to add a teen to your policy rather than putting them on their own.
You might want to investigate other car insurance companies and compare what your costs will be once your teen is added to your insurance. Remember that they will likely be on your insurance for years. Your current provider may or may not offer the cheapest rates available to you in the long run, and it’s worth it to investigate all your options before making any changes.

2. The Car They Drive Matters

While it may make your teen happy to be handed the keys to their shiny new dream car, that’s probably not the best choice when it comes to lowering auto insurance costs.
Your auto insurance rates drop about 3.4 percent for every year your car ages.3 While rates depend on a number of variables, insuring a brand new Audi convertible is likely to cost much more than a used Mazda. Regardless, as your teen acclimates to life behind the wheel, it’s advisable that you buy them a safer, possibly used car as opposed to a new one that “looks” nicer.

A good idea is getting your teen involved in the car shopping process. Have them research which cars are affordable and safe, but also allow them to have a say by looking for one they’ll like.

3. Know Your Insurance Policy & State Policy

lt to make generalizations about auto insurance because so much depends on the actual
self. Insurance companies widely differ in rates and policies. Your insurance company may have a policy about new teen drivers you’re not even aware of. For instance, certain companies don’t charge to cover your teen while they have their driving permit. Overall, the best option is to have a discussion with your insurance company about your teen’s situation and how it will impact your car insurance.

Moreover, states have different policies when it comes to age and insurance requirements. Certain states require that teens be covered by insurance to get their learner’s permit, while others only require that licensed drivers be covered. Either way, it’s smart to inform your insurer when your teen gets their learner’s permit and even smarter to get them insured as soon as possible.

4. Investigate Discount Options

Again, this differs from company to company, but certain insurers offer discounts for young drivers. Check if your insurance company offers any of these to get some relief on your teen’s auto insurance:

Good Student Discount: This discount rewards student drivers for achieving high grades. The threshold depends on the insurance company.
If your teen takes an approved safe driving course, they may qualify for this discount.
Let your insurance company know when your teen leaves for college. If they’re not taking a car with them and attend a college over 100 miles away, you might get some insurance relief.

Among all the financial considerations to make before adding your teen to your auto insurance, there’s a more personal consideration, too: holding your teen accountable. The first year of licensure is typically the riskiest for teenagers.4 Ensure that you teach your teen important safety and car care principles before easing them into independent driving.


This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for
or sale of any security.

Coronavirus Affects Federal, State, and Local Deadlines

By | Uncategorized

Coronavirus Affects Federal, State, and Local Deadlines

Federal, state, and local governments have extended a number of deadlines amid the coronavirus pandemic.  Here are just a few of the deadlines that have been affected.

Federal and state income taxes

The IRS has postponed the due date for filing federal income tax returns and making tax payments from April 15, 2020, to July 15, 2020. No interest, penalties, or additions to tax will be incurred by taxpayers during this 90-day period for any return or payment postponed under this relief provision.

The relief  is automatically given to all taxpayers (they do not need to file any additional forms to qualify) and applies to federal income tax payments (for taxable year 2019) and estimated tax payments (for taxable year 2020) due on April 15, 2020, including payments of tax on self-employment income. There is no limit on the amount of tax that can be deferred.

Many state income tax deadlines have also been postponed. You can find more information  on your state government’s website.


The REAL ID Act, passed by Congress in 2005 set minimum security standards for state-issued driver’s licenses and identification cards. Under the Act, residents of every state and territory are required to have a REAL ID-compliant license/identification card, or another acceptable form of identification (such as a passport), in order to access federal facilities, enter nuclear power plants, and board commercial aircraft.1

The initial deadline for REAL ID compliance was October 1, 2020. As a result of the pandemic, the U.S. Department of Homeland Security has extended the deadline  to October 1, 2021.   For more information, visit

Driver’s license and vehicle registrations

Many state departments of motor vehicles have temporarily closed or limited in-person transactions due to  the pandemic.  As a result, they are giving extensions/waiving deadlines for driver’s license and vehicle registration renewals —  in some cases up to 90 days.  Some states have even waived road test requirements for teenagers who have completed all their driver’s education requirements.

Visit your state’s department of motor vehicles website for more information on the various deadlines/extensions and to find out which types of transactions can be completed online; many states have expanded their online services during the pandemic.



Local property taxes

Many    municipalities  are offering economic relief to homeowners during the pandemic by extending property tax deadlines or waiving penalties/fees  for late property tax payments.  This type of tax relief usually applies only  to individuals who pay their property taxes directly and not those whose property


taxes are collected in an escrow account by their loan servicer. You can contact your local government’s tax office to check whether property tax deadlines have been postponed.

1Department of Homeland Security, March 2020

Paycheck Protection Program – CPAs & Business Partners

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Paycheck Protection Program – CPAs & Business Partners

We have put together some helpful information regarding the Paycheck Protection Program as part of the Cares-Act.  There are many great features for small businesses (those with under 500 employees).  We understand that each business is different in scope, ability see revenue (any) over the coming months as we deal with this Covid-19 storm.   We will continue to send updates on the ever changing environment and would love to hear from you.


What to Know About the Paycheck Protection Program

The Paycheck Protection Program (PPP) was created under the Coronavirus Aid, Relief, and Economic Support Act, signed into law on March 27th.

The PPP prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses.

Small businesses and organizations, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program standards.

Three Helpful links included (Place into your web browser)

  1. FACT sheet for the Paycheck Protection Program
  2. Application –  Don’t apply yet—keep reading for timelines, eligibility requirements, and other details of the program.
  3. Additional Article on the Paycheck Protection Program –


When to Apply:

Starting April 3, 2020, small businesses and sole proprietorships can apply for loans under the Paycheck Protection Program.

Starting April 10, 2020, independent contractors and self-employed individuals can apply.

Once the application process opens, we encourage you to move quickly, as there is a funding cap under the legislation and loan applications will be processed as received.

There are eligibility, use, and loan forgiveness requirements. 

Is there any penalty to apply for the PP Loan if you later determined to be ineligible?

No, there is no penalty for applying if the business is later determined by the SBA to be ineligible to apply. Keep in mind, the applicant is required to make a good faith certification that, among other things, it is necessary to obtain the loan to support ongoing operations of the business and the funds will be used to retain workers and maintain payroll, or make a mortgage, lease or utility payments.



Who is eligible for a “Paycheck Protection” (PP) loan under § 1102 of CARES?



Generally, businesses with less than 500 employees are eligible for PP loans. Businesses include any business concern, nonprofit organization, veterans organization or Tribal business concern.



Additionally, any business that qualifies as a small business under the criteria and size standards in 13 CFR 121.

Which employees are counted for purposes of the 500-employee threshold?

Employees for this purpose include full-time, part-time or employed on another basis.

Do employees of affiliates count towards the 500-employee threshold?

The general rule is that employees of affiliates are generally counted towards the 500-employee threshold under the SBA affiliation rules (13 CFR § 121.103.)

Are there exceptions?

Two exceptions make it much easier for businesses in the accommodations and restaurant industries to qualify for PP loans:

  • For businesses with more than one physical location, any business concern that employs not more than 500 employees per physical location and that is assigned a North American Industry Classification System code beginning with 72 (see Exhibit A for a complete list) at the time of disbursal is eligible to receive a covered loan (NOTE: These include businesses in Subsector 721 (Accommodation) such as hotels and casino hotels and Subsector 722 (Food Services and Drinking Places) such as bars and restaurants.)
  • There is also a general waiver of the affiliation rules (See Q&A 2, above) for any business concern described in the preceding paragraph with not more than 500 employees

What is the amount of a PP loan that is available to an eligible recipient?

An eligible recipient of a PP loan is eligible to receive a loan in the amount of 250% of the average total monthly payments by the applicant for payroll costs incurred 1 year before the date on which the loan is made. There is also an overall limit of $10 million dollars.

The Act provides that during the covered period, the requirement that a small business concern is unable to obtain credit elsewhere does NOT apply to a covered loan.

Are PP Loans available to dispensaries and other marijuana-related businesses?

 No, because federal law currently prohibits the distribution and sale of marijuana, financial transactions involving a marijuana-related business would generally involve funds derived from illegal activity. Therefore, many businesses that derive revenue from marijuana-related activities or that support the end-use of marijuana may be ineligible for SBA financial assistance.

 CFR § 120.110 (h).

Under the SBA’s Policy Notice dated April 3, 2018, the following businesses are ineligible:

(a) “Direct Marijuana Business” — a business that grows, produces, processes, distributes, or sells marijuana or marijuana products, edibles, or derivatives, regardless of the amount of such activity. This applies to personal use and medical use even if the business is legal under local or state law where the applicant business is or will be located.

(b) “Indirect Marijuana Business” — a business that derived any of its gross revenue for the previous year (or, if a start-up, projects to derive any of its gross revenue for the next year) from sales to Direct Marijuana Businesses of products or services that could reasonably be determined to support the use, growth, enhancement or other development of marijuana.

Examples include businesses that provide testing services, or sell grow lights or hydroponic equipment, to one or more Direct Marijuana Businesses. Additionally, businesses that sell smoking devices, pipes, bongs, inhalants, or other products that may be used in connection with marijuana are ineligible if the products are primarily intended or designed for such use or if the business markets the products for such use.

Certain “Hemp-Related Businesses” are ineligible unless the business can demonstrate that its business activities and products are legal under federal and state law. Examples of legal hemp products include paper, clothing, and rope.

The PP loan program is based upon the SBA loan program. Absent a specific override in the CARES Act of the illegal activity limitation, marijuana-related businesses would continue to be ineligible.

Loan Use:

What Can the Paycheck Protection Loan Be Used For?

(i) Payroll costs and (ii) interest payments on mortgage obligations, rent, utilities, and interest on other debt obligations incurred before February 15, 2020.

What is included in “payroll costs” for this purpose?

 Payroll costs are defined as the sum of payments of any compensation for employees that is a —

  • salary, wage, commission, or similar compensation (capped at $100,000 prorated for the covered period or $8,333 per month)
  • payment of cash tip or equivalent
  • payment for vacation, parental, family, medical, or sick leave
  • allowance for dismissal or separation
  • payment required for the provisions of group health care benefits, including insurance premiums
  • payment of any retirement benefit
  • payment of State or local tax assessed on the compensation of employees and the sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in 1 year, as prorated for the covered period

What is excluded from “payroll costs” for this purpose?

Specifically excluded from the definition of payroll costs are —

  • the compensation of an individual employee above an annual salary of $100,000, as prorated for the covered period
  • FICA (Social Security and Medicare) taxes imposed on the employer, FICA (Social Security and Medicare) taxes withheld from employees’ wages, federal income taxes withheld from employees’ wages withholding during the covered period
  • any compensation of nonresident alien employees
  • qualified sick leave wages for which a credit is allowed under FFCRA
  • qualified family leave wages for which a credit is allowed under FFCRA

Is the business required to sign a guarantee or provide collateral for the loan?

No, normal requirements for SBA loans have been waived.

Loan Forgiveness:

Is any portion of a PP loan forgiven?

An eligible recipient shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred and payments made during the covered period:

  • Payroll costs (as defined above)
  • Any payment of interest on any covered mortgage obligation (not including prepayment of or payment on principal)
  • Any payment on any covered rent obligation
  • Any covered utility payments
  • Additional wages are considered for employers with tipped employees

NOTE: This amount (the “Base Loan Forgiveness Amount”) is potentially subject to further reductions.

What is the covered period for purposes of the loan forgiveness provisions?

 “Covered period” means the 8-week period beginning on the date of the origination of a covered loan.

Are there further potential reductions to the Base Loan Forgiveness Amount?

Yes, there are potential reductions for reductions in employees and reductions in salaries.

Reductions in Employees:

The Base Loan Forgiveness Amount is reduced by multiplying it by the following fraction:

  • The numerator of which is the average number of full-timeequivalent employees per month employed by the eligible recipient during the covered period
  • The denominator of which is, at the election of the eligible recipient, either the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019, and ending on June 30, 2019, or the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on January 1, 2020, and ending on February 29, 2020.

For example, if the company employs 50 employees during the covered period and employed 100 employees during the period between January 1, 2020, and February 29, 2020, the Base Loan Forgiveness Amount would be multiplied by 50/100 or one-half.

Reductions in Salaries:

Taking into account only employees who did NOT earn $100,000 (prorated for the applicable period of employment) for any pay period in 2019, the Base Loan Forgiveness Amount is further reduced by any reduction in such employees’ wages during the covered period that is over 25 percent of the total salary or wages of the employee during the most recent full quarter during which the employee was employed before the covered period.

What happens if I rehire employees or restore wages?

The reductions to the Base Loan Forgiveness Amount for reductions in employees or wages do not apply if the borrower eliminates these reductions no later than June 30, 2020.

How does a borrower claim loan forgiveness?

The borrower must submit to the lender an application that includes:

  • documentation verifying the number of full-time equivalent employees on payroll and pay rates for the applicable periods including, payroll tax filings reported to the Internal Revenue Service and State income, payroll, and unemployment insurance filings;
  • documentation verifying payments on covered mortgage obligations, lease obligations and utility payments
  • certifications that the documentation presented is true and correct

The amount for which forgiveness is requested was used to retain employees, make interest payments on a covered mortgage obligation, make payments on a covered rent obligation, or make covered utility payments, and any other documentation the Administrator determines necessary.

The statute makes clear that will be no loan forgiveness absent documentation.

Is the loan forgiveness considered taxable income to the borrower?


Federal Student Loan Borrowers Get Expanded Relief in CARES Act

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Federal Student Loan Borrowers Get Expanded Relief in CARES Act

On March 27, 2020, Congress passed the CARES Act, the largest economic stimulus bill in the history of the United States, in response to the coronavirus pandemic.1 Included in the legislation are new rules for student loan relief that supersede the rules that were announced only a week earlier by the Department of Education.For more information on both sets of rules, visit the federal student aid website.

What new relief is being offered?

The  new legislation provides a six-month automatic payment suspension (administrative forbearance) for any student loan held by the federal government. This six-month period ends on September 30, 2020.  Borrowers do not need to  contact their loan servicer to request a suspension; they will be automatically placed in administrative forbearance. Under the previous policy, the payment suspension was for two months and it was not automatic; borrowers had to contact their loan servicer to opt in.

The new stimulus legislation also provides a temporary incentive for employers to pay down their employees’ student  debt balances. Specifically, employers are able to contribute up to $5,250 toward an employee’s student debt through December 31, 2020 without any tax consequences for the employee.

What loans qualify for the suspension?

Only student loans held  by the federal government are eligible. This includes Direct Loans (which includes PLUS Loans), as well as Federal Perkins Loans and Federal Family Education Loan (FFEL) Program loans held by the Department of Education. Private student loans are not eligible.

Will interest continue to accrue during the suspension period?

No. Interest will not accrue during the six-month suspension period. The interest rate is being set at 0%. Also, due to the Department of Education’s earlier student loan relief rules, the interest rate on all eligible federal student loans is effectively set at 0% from March 13, 2020 through September 30, 2020.

What happens with auto-debit payments?

Auto-debit payments are suspended during the administrative forbearance period. Any auto-debit payments processed between March 13, 2020 and September 30, 2020 can be refunded. Borrowers should contact their loan servicer if they wish to request a  refund.

Can borrowers keep making their student loan payments?

Yes. Borrowers can choose to keep making their monthly student loan payments during the six-month suspension period if they wish. Borrowers should contact their loan servicer to opt out of the administrative forbearance period and continue their auto-debit payments. Borrowers also have the option to make manual (i.e., not auto-debit) payments during the administrative forbearance period.

During this period of 0% interest, the full amount of a borrower’s payment will be applied to principal (once all interest accrued prior to March 13, 2020, is paid). Borrowers can also choose to make partial payments during the suspension period.


How will the suspension period affect the Public Service Loan Forgiveness Program?

Under the Public Service Loan Forgiveness (PSLF) Program, borrowers who work in an eligible public service job and make 120 on-time student loan payments are eligible to have the remaining  balance on their federal Direct Loans forgiven.2 Under the new legislation, the six-month freeze on student loan payments will not affect the 120-month running period for purposes of the PSLF program. In other words, each month of the suspension period will still count toward a borrower’s 120-payment tally, even if the borrower does not make any payments during the six-month period.

How can borrowers contact their loan servicer?

A loan servicer is the company that handles a loan’s billing and provides related services. Borrowers who want to contact their loan servicer for any reason should try to do so online or by phone. For borrowers who do not know who their loan servicer is or how to contact them, they can visit or call 1-800-4-FED-AID for assistance.

1) Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted March 27, 2020

2) U.S. Department of Education, Office of Federal Student Aid, 2020

Coping with Market Volatility: Continuing to Invest May Help You Stay on Course

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Coping with Market Volatility: Continuing to Invest May Help You Stay on Course

In the current market environment, the value of your holdings may be fluctuating widely — and it’s natural to feel tentative about further investment. But regularly adding to an account that’s designed for a long-term goal may cushion the emotional impact of market swings. If losses are offset even in part by new savings, the bottom-line number on your statement might not be quite so discouraging. And a basic principle of investing is that buying during a down market may help your portfolio grow when the market turns upward again.

If you are investing a specific amount regularly regardless of fluctuating price levels (as in a typical workplace retirement plan), you are practicing dollar-cost averaging. Using this approach, you may be getting a bargain by continuing to buy when prices are down. However, you should consider your financial and psychological ability to continue purchases through periods of fluctuating price levels or economic distress; dollar-cost averaging loses much of its benefit if you stop just when prices are reduced. And it can’t guarantee a profit or protect against a loss.

If you can’t bring yourself to invest during this period of uncertainty, try not to let the volatility derail your savings program completely. If necessary to help address your concerns, you could continue to save, but direct new savings into a cash-alternative investment until your comfort level rises. Though you might not be buying at a discount, you could be accumulating cash reserves that could be invested when you’re ready. The key is not to let short-term anxiety make you forget your long-term plan. We’re here to help and to answer any questions you may have.

All investing involves risk, including the possible loss of principal, and there is no guarantee that any investment strategy will be successful.