<p>The historic $2 trillion coronavirus relief package passed unanimously by the Senate and signed into law by President Trump on March 27 contains a wide range of provisions in its 880 pages, including some significant temporary exclusions involving people&#8217;s retirement accounts.</p>
<p>To help those impacted by the economy-crippling COVID-19 crisis, the <a href="https://www.congress.gov/bill/116th-congress/senate-bill/3548/text">Coronavirus Aid, Relief, and Economic Security Act</a> (CARES Act) allows people to withdraw up to $100,000 from their IRAs and 401(k)s with no tax penalties for three years and waves the usual 10% withdrawal fee for those younger than 59½.</p>
<p>&#8220;The new law increases the dollar amount you can loan yourself from your own 401(k) from $50,000 to $100,000 and also creates a penalty-free early distribution rule whereby IRA or 401(k) account owners under age 59-and-a-half can take a penalty-free retirement account distribution of up to $100,000,&#8221; Mat Sorensen explains in a piece for <a href="https://www.entrepreneur.com/article/348352">Entrepreneur</a>.</p>
<p>So long as individuals repay their IRAs within three years of the withdrawal date, there will be no tax liability. &#8220;You can repay all or a portion of the distribution within three years, and the repayments will not be counted toward the annual contribution limits,&#8221; <a href="https://www.washingtonpost.com/business/2020/03/30/coronavirus-stimulus-cares-act/">Washington Post</a> Columnist <span class="author-name font-bold link blue hover-blue-hover">Michelle Singletary explains. </span></p>
<p>&#8220;In effect, the CVD drill allows you to borrow up to $100,000 from your IRA(s) and repay the amount(s) any time up to three years later with no federal income tax consequences,&#8221; <a href="https://www.marketwatch.com/story/coronavirus-stimulus-package-tax-relief-withdraw-100k-from-your-ira-and-repay-in-3-years-with-zero-tax-liability-2020-03-27">MarketWatch</a>&#8216;s Bill Bischoff explains. &#8220;And there are no limitations on what you can use [coronavirus-related distribution] funds for during the three-year period.&#8221;</p>
<p>The exemption is retroactively effective as of Jan. 1, 2020 and lasts through Dec. 31, 2020.</p>
<p>The usual 10% penalty for withdrawals imposed on those younger than 59½ is also waved for this year.</p>
<p>As explained by Singletary, the bill also suspends required minimum distributions (RMDs) for 2020 for those 72 and older. &#8220;Additionally, the waiver covers the first RMD, which individuals may have delayed from 2019 until April 1, according to a <a href="https://www.fidelity.com/learning-center/personal-finance/coronavirus-stimulus-package" target="_blank" rel="noopener noreferrer">summary</a> of the Act’s provisions by Fidelity Investments,&#8221; she notes.</p>
<p>So who qualifies for the exemptions? As Bischoff<span class="gray-dark"> details, the exemptions apply to anyone</span></p>
<ul>
<li><em>who is diagnosed with COVID-19 by a test approved by the Centers for Disease Control and Prevention.</em></li>
<li><em>whose spouse or dependent (generally a qualifying child or relative who receives more than half of his or her support from you) is diagnosed with COVID-19 by such a test.</em></li>
<li><em>who experiences adverse financial consequences as a result of being quarantined, furloughed, laid off, or having work hours reduced due to COVID-19.</em></li>
<li><em>who is unable to work because of lack of child care due to COVID-19 and experiences adverse financial consequences as a result.</em></li>
<li><em>who owns or operates a business that has closed or had operating hours reduced due to COVID-19 and has experienced adverse financial consequences as a result.</em></li>
<li><em>who has experienced adverse financial consequences due to other COVID-19-related factors to be specified in future IRS guidance.</em></li>
</ul>
<p>Along with the temporary retirement exemptions, the bill provides a series of sweeping provisions designed to help Americans and businesses make it through this unprecedented economic upheaval. One of those provisions is direct payments to Americans of $1,200 per individual ($2,400 for married couples), and an additional $500 for dependents, for those who make up to $75,000 individually and couples that make up to $150,000. The distribution reduces and phases out entirely for those earning &#8220;more than $99,000; head-of-household filers with one child, more than $146,500; and more than $198,000 for joint filers with no children,&#8221; as <a href="https://www.politico.com/news/2020/03/25/whats-in-stimulus-package-coronavirus-149282">Politico</a> explains.</p>
<p><strong>Related: <a href="https://www.dailywire.com/news/fed-gives-dire-estimates-on-number-of-jobs-lost-due-to-lockdowns-but-offers-hope">Fed Gives Dire Estimates On Number of Jobs Lost Due To Lockdowns, But Offers Hope</a></strong></p>

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$2 Trillion Relief Bill Allows You To Withdraw Up To $100K From IRA, 401(k), Repay In 3 Years With No Tax Penalty

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$2 Trillion Relief Bill Allows You To Withdraw Up To $100K From IRA, 401(k), Repay In 3 Years With No Tax Penalty