Individuals who are eligible for coronavirus-related relief may be able to withdraw up to $100,000 from IRAs or workplace retirement plans before Dec. 31, 2020, if their plans allow. In addition to IRAs, this relief applies to 401(k) plans, 403(b) plans, profit-sharing plans and others.
Key elements related to withdrawals:
- May be included in taxable income either over a three-year period (one-third each year) or in the year taken, at the individual’s option.
- Are not subject to the 10% additional tax on early distributions that would otherwise apply to most withdrawals before age 59½,
- Are not subject to mandatory tax withholding, and
- May be repaid to an IRA or workplace retirement plan within three years.
Additionally, qualifying individuals have until Sept. 22, 2020, to borrow as much as $100,000 (up from $50,000) from a workplace retirement plan, if their plan allows. Loans are not available from an IRA. Check with your plan administrator for plan details.
Details of eligibility can be found in IRS Notice 2020-50.