COVID-19 Retirement Plan Distributions
Updated: Jan 5, 2021
Retirement Plan Distributions
COVID-19-related distribution: The 10% early-withdrawal penalty is waived for COVID-19-related distributions up to $100,000 from qualified retirement plans or IRAs. A COVID-19-related distribution is one made during the 2020 calendar year to an individual who is diagnosed with COVID-19 by a CDC-approved test, whose spouse or dependent is diagnosed with COVID-19, or who experiences adverse financial consequences as a result of being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to lack of childcare due to COVID-19, or closing or reducing hours of a business owned or operated by the individual. Any income from an early withdrawal can be included in income ratably over a 3-year period. The withdrawn amount can also be recontributed over
three years without regard to annual contribution limits.
Retirement plan loans: Plan loan limits are increased from $50,000 to $100,000 and loan repayment may be delayed up to one year.
Required minimum distribution (RMD): RMDs are waived for calendar year 2020. If you are currently taking RMDs, you are not required to do so for 2020. This also includes your first RMD, which you may have delayed from 2019 until April 1, 2020.