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The CARES Act for Individuals: Other Provisions

In this video Mark discusses other provisions of the CARES Act for individuals.

NO 10% PENALTY, INCOME REPORTING AND RETURN OF DISTRIBUTION

No 10% Penalty for premature distributions from Retirement Plans if related to coronavirus – Taxpayer who affected by the coronavirus may withdraw up to $100,000 from their retirement plan penalty free in 2020.  You are affected by coronavirus if:

  1. You are diagnosed with coronavirus
  2. Your spouse or dependent is diagnosed with coronavirus
  3. You experience adverse financial consequences as a result of being quarantined, furloughed, laid-off, have work hours reduced, or being unable to work due to the lack of child care due the virus outbreak.

Reporting the income:  The taxpayer will report any coronavirus distribution as income ratably over three years, unless elected to report all in one year

Return the Distribution:  The taxpayer is allowed to return the coronavirus distribution to their account within 3 years of taking the distribution


RMD REQUIREMENT WAIVED for 2020

RMD Requirement Waived in 2020 – The Required Minimum Distribution (RMD) requirements are waived for 2020.


EDUCATION PAYMENTS MADE BY EMPLOYER

Student Loan Repayments – An employer with a qualified plan may now exclude up to $5,250 of student loan repayments from the employees’ income