Retirement Plan Distributions

The CARES Act waives the 10% additional tax on early distributions related to the coronavirus from retirement plans and IRAs for amounts not to exceed $100,000 subject to the following rules:

    • Amounts distributed may be repaid at any time over the three-year period commencing on the date the distribution was received.
    • To the extent that the amounts are not repaid, the income inclusion with respect to any coronavirus distribution can be included ratably over the three taxable years beginning with the taxable year in which the distribution was received;
    • The distribution provision applies to individuals who have been diagnosed with SARS-CoV-2 or COVID-19 by a test approved by the Centers for Disease Control (CDC), their spouse or dependent who has been diagnosed by such a test, or a person who experiences adverse financial consequences as a result of being quarantined, furloughed, laid off, or suffered reduced working hours, or who is unable to work due to lack of child care.

 

Loans from Retirement Plans

  • Loans from qualified employer plans up to $100,000 (increased from $50,000) are permitted in the 180 days beginning on the date of enactment.
  • For outstanding loans, repayment dates between the date of enactment of the CARES Act and December31, 2020 are delayed for one year, and subsequent payments as well as interest accrual are adjusted accordingly. A plan will not be disqualified as a result of plan amendments in accordance with the CARES Act provisions.
  • The requirements to be eligible for the expanded loan limits and repayment delays are the same as outlined above.

Required Minimum Distributions

  • Minimum distribution rules are waived for calendar year 2020 for IRAs and certain defined contribution plans.

 

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