March 27, 2020 -Tax relief for individuals through the Coronavirus Aid, Relief, and Economic Security (CARES) Act is here. This includes a modification to the tax treatment of certain retirement fund withdrawals.
For retirement plan distributions, an exception would be provided to the 10% early withdrawal penalty for distributions up to $100,000 for coronavirus-affected individuals. Income from such distributions would be recognized over a three-year period. Taxpayers may recontribute funds to their eligible retirement plan in the first year or within three years without regard to the year’s contribution cap.
Another modification for coronavirus-affected individuals includes the increase in loan limits from retirement plans from $50,000 to $100,000. Lastly, the repayment deadlines for current loans that are due in 2020 are being delayed.
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Criste’ L. Staples CPA
With significant experience in both private and public accounting environments, Criste' provides accounting and tax services to both individuals and a diverse range of business clients.