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Individuals may request coronavirus-related withdrawals from IRAs without 10% tax penalty

Under the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-136 (CARES Act), eligible individuals may request withdrawals or loans, up to $100,000, from their qualified employer retirement plans and Individual Retirement Arrangements (IRAs) without being subject to the 10-percent additional tax penalty on early distributions that would otherwise apply.


To be eligible, an individual must meet one of the following requirements:

  1. The individual is diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention;

  2. The individual’s spouse or dependent is diagnosed with such virus or disease by such a test; or

  3. The individual experiences adverse financial consequences as a result of (a) being quarantined, being furloughed or laid off, or having work hours reduced due to such virus or disease; (b) being unable to work due to lack of childcare due to such virus or disease; or (c) closing or reducing hours of a business owned or operated by the individual due to such virus or disease.

Note that the IRS may provide alternative eligibility requirements in future guidance.


Eligible individuals may be able to request coronavirus-related withdrawals of up to an aggregate limit of $100,000 from their qualified employer retirement plans and IRAs. Note that these withdrawals are not subject to the 10-percent additional tax on early distributions that would otherwise apply to most withdrawals before reaching age 59½. And if not treated as a loan, the tax due on withdrawals can be paid over the course of three years (remember, withdrawals are subject to income tax). The relief applies to any withdrawals made during 2020.


In lieu of a withdrawal, eligible individuals may be able to request a loan from their qualified employer retirement plan account. These loans may be repaid to a qualified employer plan or IRA within three years. The CARES Act also increased the loan limit, allowing eligible individuals to request a loan of up to $100,000 or 100% of the vested account balance, whichever is lower. The increased loan limit under the CARES Act is effective for loans made during the 180-day period beginning on March 27, 2020.

In addition, if an eligible individual has an outstanding loan (received on or after March 27, 2020), then that individual may opt to delay, for up to one year, any loan repayments that are due at any time between March 27, 2020 and December 31, 2020.

For more information, see the following resources:

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