Retirement Plan Distributions
- If you need to take a retirement plan distribution due to the coronavirus, you can do so without the 10% early withdrawal penalty, requirements are:
(1) diagnosis with the coronavirus by a CDC approved test of the individual, a spouse or dependent,
(2) Individual experiences adverse financial consequences as a result of being quarantined, furloughed or laid off or working reduced hours due to impacts of the coronavirus, unable to work due to lack of child care, closing or reduced hours of a business owned or operated by the individual due to impacts of the coronavirus. - The amount(s) of distribution(s) cannot exceed $100,000 in the tax year
- If you take a distribution, you can make one or more contributions over a 3-year period (starting on the day after the date on which the distribution was received) back into an eligible retirement plan, not to exceed the amount of the original distribution(s) - these are treated like rollover contributions.
- The individual can include the coronavirus related distribution in income evenly over a 3-year period instead of being taxed 100% in 2020.
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