CARES ACT PROVISIONS RELATED TO RETIREMENT PLANS - The Law Offices of Joseph A. Marra

• Affected retirement plans

i. IRA’s

ii. 401(a) Plans

iii 401(k) Plans

iii. 403(b) Plans

• An otherwise premature distribution of up to $100,000.00 can be made if:

i. The individual was diagnosed with COVID-19; or

ii. The individual’s spouse was diagnosed with COVID-19; and

iii. The individual has experience- adverse financial consequences due to COVID-19

• With respect to COVID-19 related distributions

i. 10% penalty tax on the early distribution is waived

ii. One can allocate the taxable portion of the distribution over a three-year period

iii. The distribution is not subject to the 20% mandatory federal withholding tax.

iv. The COVID-19 distribution can be repaid within 3 years from the date of receipt..

• One has 180 days beginning on March 27, 2020 to take a loan which is capped at $100,000 less the value of any other outstanding loans.

• Required Minimum Distributions (RMD’s) are waived for 2020, including those that must be taken before April 1, 2020 but only to the extent not distributed before January 1, 2020

If you have questions about how the CARES Act can impact your retirement plan, contact The Law Offices of Joseph A. Marra today!