By JP Pedinielli

Here are the highlights of retirement plan relief provisions available to those adversely impacted by Covid-19 (who isn’t?):

  • Distributions can be made up to $100,000 from retirement plans in 2020 without an early withdrawal penalty. 
  • Distributions can be taken until December 31, 2020 and can come from multiple sources - such as a 401(k), qualified retirement plan, or an IRA.
  • Distributions will be exempt from the 20% federal withholding tax - but taxes may still be due unless amounts are repaid.
  • No tax will be due on distributions if the distribution is repaid to the plan within three years and/or the tax can be spread over a three-year period.
  • Loans are allowed from retirement plans up to the lessor of $100,000 or 100% of vested balances -- to be paid back over five years. 
  • Required Minimum Distributions are suspended for 2020 and 2020 RMD’s already taken maybe be returned if within the 60 day rollover period. 
  • The period for funding 2019 IRA’s normally due 4/15/2020 has been extended until 7/15/2020. 

Please consult a tax or investment adviser to verify your eligibility before you take advantage of these relief provisions.