The CARES ACT Includes Coronavirus-Related Relief in Retirement Accounts

Author:
Publish date:
Video Duration:
2:34

The Internal Revenue Code generally imposes a 10% early withdrawal penalty on distributions from a retirement plan taken prior to a participant being at least 59½ years old or qualifying for another exception.

The CARES Act, however, waives the 10% penalty for “coronavirus-related” distributions. A coronavirus-related distribution is one that is made to an individual:

  • Whose spouse or dependent is diagnosed with such virus;
  • Who experiences adverse financial consequences as a result of being quarantined, being furloughed, getting laid off, having work hours reduced, being unable to work due to lack of child care, having a business closing, or experiencing reduced hours.

Also of note, a coronavirus-related distribution may be included in income over a three- year period.

Listen to Denise Appleby of Appleby Retirement Consulting discuss this provision of the CARES Act in this Retirement Daily podcast

Catch up on the Latest Videos on TheStreet!

Related Videos