The Internal Revenue Service (IRS) answers Frequently Asked Questions (FAQs) about retirement plan withdrawals during Covid-19. This information is taken directly from the IRS website. I’m sharing it to reach additional taxpayers!
Section 2202 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020, provides for special distribution options and rollover rules for retirement plans and IRAs and expands permissible loans from certain retirement plans.
What are the special rules for retirement plans and IRAs in section 2202 of the CARES Act?
In general, section 2202 of the CARES Act provides for expanded distribution options and favorable tax treatment for up to $100,000 of coronavirus-related distributions from eligible retirement plans (certain employer retirement plans, such as section 401(k) and 403(b) plans, and IRAs) to qualified individuals, as well as special rollover rules with respect to such distributions.
It also increases the limit on the amount a qualified individual may borrow from an eligible retirement plan (not including an IRA) and permits a plan sponsor to provide qualified individuals up to an additional year to repay their plan loans.
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If I have a 403(b) and I have $7,000 placed within and made $77. If I want to pull out my $7,000, what penalties or taxes would I have to pay? Would only the $77 be assigned a penalty and would the $7,000 be taxed at my regular tax rate? Also, aside from not liking the 403(b), I'm looking to use the funds to assist me in buying a condo (a primary residence).
Do you do tax return . I took out money from my retirement plan as part of the cares act, in 2020 . I paid it back in 2021 . H&R Block don’t seem to know what to do about this and need to know if I have to pay taxes on it. From what I read I shouldn’t have to pay taxes on it if I paid it back
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