COVID-19 – PPP, Oil and the SECURE Act

May is just around the corner and we hope that you’ve enjoyed some of this awesome weather that we have been experiencing in the Midwest! As Iowa announced it will not be going back to school for the rest of the year, many other states followed suit. Forty-three states so far have decided to stay closed for the remainder of the school year. But on a positive note, POTUS has stated that several states may reopen by May 1st.

We started this past week with an agreement on a $484 billion bill for more funds to be accessed by small businesses. This, combined with the coronavirus relief, will total about $2.7 trillion for states, businesses, and employees. To put this in perspective, in 2008, the funds available totaled around $2 trillion.

For a fun game does anyone know what comes after a trillion? It’s a quadrillion!

PPP Round 2 

This is a breakdown of the bill that passed this past week:

  • Paycheck Protection Program – $310 billion
  • Small-business emergency grant and loan program – $60 billion
  • Funds for Hospitals – $75 billion
  • Coronavirus testing – $25 billion

If you plan to apply for PPP this time around – the sooner the better. Banks will have their own applications but collecting what you need will take some work.

Lots of Noise about Oil 

On Monday of this past week, U.S. oil prices were trending towards their worst day on record. “The oil market is experiencing the worst volatility we have seen in decades. This is a triple whammy caused by an oversupply of crude oil, low demand for fuels due to the COVID-19 lockdown, and a shortage of storage capacity,” Eddie Habibi, CEO, and founder of security firm PAS Global. Quite simply, the need for oil is so low that we are running out of places to put it and unfortunately, it is hard to take advantage of the price because we aren’t going anywhere. What could this mean for us? We will likely see low prices for a while and this could be the last part of the market to recover as there is such a surplus at this point.

SECURE Act and Required Minimum Distribution (RMD’s)

For those of you who don’t know what RMD’s are, they are the minimum amount you must withdraw from your account each year.  Before the SECURE Act, you had to start taking withdrawals from your IRA, SIMPLE IRA, SEP IRA, or retirement plan account when you reached age 70?.  If your 70th birthday falls on July 1, 2019, or later, you do not have to take withdrawals until you reach age 72.

Minimum distribution rules apply to the following:

  • traditional IRAs
  • SEP IRAs
  • 401(k) plans
  • 403(b) plans
  • 457(b) plans
  • Profit-sharing plans
  • other defined contribution plans

Please see this link to get more information about this as well as a calculator to help you calculate your required minimum distribution.