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Penalty-Free Retirement Distributions Taxed Ratably Over Three Years

Under the CARES Act, you may be able to withdraw up to a total of $100,000 from IRAs and retirement plans such as 401(k) and 403(b) plans from January 1, 2020 through December 30, 2020 for coronavirus-related relief.

These coronavirus-related withdrawals:

• Are not subject to the 10% penalty on early distributions that would otherwise apply to most withdrawals before attaining age 59½,

• Are not subject to mandatory income tax withholding,

• Can be included in taxable income either over a three-year period (one-third each year) OR all in year 2020,

• Can be repaid in part or in full to IRAs or retirement plans within three years from the date the withdrawal is received without having to include the repaid amount in taxable income. The repaid amount will be treated as an eligible rollover. An amendment can be filed to claim any tax previously paid on the amount of the withdrawal that is repaid and treated as a rollover.

Who is Eligible to Take a Coronavirus-Related Withdrawal?

You are eligible if:

• You, your spouse OR your dependent is diagnosed with coronavirus (COVID-19) or SARS-CoV-2 by a test approved by the Centers for Disease Control and Prevention;

• You experience adverse financial consequences as a result of being quarantined, being furloughed or laid off, or having work hours reduced due to COVID-19 or SARS-CoV-2;

• You experience adverse financial consequences as a result of being unable to work due to lack of child care due to COVID-19 or SARS-CoV-2; or

• You experience adverse financial consequences as a result of closing or reducing hours of a business that you own or operate due to COVID-19 or SARS-CoV-2.