NEW RETIREMENT ACCOUNT RULES: Congress relaxes requirements in response to coronavirus
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, enacted in response to the 2020 coronavirus pandemic, includes several provisions that modify retirement account contribution and distribution rules. For example:
- Retirement account owners may withdraw up to $100,000 from retirement accounts without penalty.
- Income tax on withdrawals may be paid over three years.
- Withdrawn funds can be returned to retirement accounts within three years.
- No required minimum distributions for 2020 (this includes inherited accounts).
- 401(k) loan limits increased to $100,000 (or 100% of account balance).
- 2019 IRA contribution deadline is extended until July 15, 2020.
Most of this relief is temporary and is not available to all retirement account owners. Nevertheless, the CARES Act may present planning opportunities for some clients. Please contact us to review how you may benefit from this legislation.