Coronavirus Aid, Relief and Economic Security Act

On Friday, March 27th, President Trump signed the “Coronavirus Aid, Relief and Economic Security Act” dubbed the CARES Act.  The 880 page, $2.2 trillion stimulus package, provides widespread emergency assistance to individuals, families, small businesses, and corporations affected by the current pandemic.

While we know there are a number of provisions within the Act, there are two that we wanted to bring to your attention.

• All required minimum distributions (RMD) from tax-deferred accounts (Traditional IRA, SEP IRA, SIMPLE IRA, 401(k), 403(b) or 457(b)) for 2020 are suspended.

• The ability to withdraw up to $100,000 from your IRA or workplace retirement plan in 2020 without the usual 10% penalty applied to early withdrawals. You will also have the option to spread out any income taxes from these withdrawals over the next three tax years – or you could replace the funds in the account within three years to avoid any tax penalty. This exception applies to coronavirus-related hardships, which include “loss of employment, reduced hours, quarantine, or being unable to work due to lack of childcare.”