The CARES Act became law in March of this year. Seems longer, doesn’t it? The CARES Act included a wide variety of provisions aimed to jump-start the U.S. economy during and after the business-slowing side effects of the coronavirus.
The Act provided special relief to those
- who were diagnosed with COVID-19,
- whose spouse or dependent were diagnosed with COVID-19, or
- who experienced adverse financial consequences as a result of
- being quarantined,
- being furloughed,
- being laid off,
- having work hours reduced,
- being unable to work due to lack of childcare due to COVID-19,
- closing or reducing hours of a business owned or operated by the individual due to COVID-19 or
- other factors as determined by the Treasury Secretary.
Those affected are potentially eligible for tax-favored distributions of up to $100,000 from an employer plan or IRA.
The Act also waived the minimum distribution requirement for qualified plans in 2020.
In June, the IRS issued Notices 2020-50 and 2020-51, which answered some of the questions raised by the CARES Act.
In Notice 2020-50, the Service added categories of taxpayers who were eligible for the special COVID-19 distributions from qualified plans:
- Those who had their pay or self-employment income reduced due to COVID-19.
- Those who had a job offer rescinded or start date for a job delayed due to COVID-19.
- Those whose spouse or other person in the household has been adversely affected by the virus.
In IRS Notice 2020-51, the IRS
- Extended the rollover deadline for those who previously took amount thought to be minimum distributions from qualified account until August 31, 2020.
- Created a special indirect rollover possibility for beneficiaries of inherited qualified accounts to replace amounts previously thought to be minimum distributions until the same August 31 date.
Unfortunately, the Service also left several questions about COVID-19 distributions and rollover of 2020 RMD distributions unanswered. If any of the information is important to you, please check with me for the latest information.
Have you or a household member been affected by COVID-19? Did you take a minimum distribution from a plan early in the year, and are now interested in putting it back? Are you confused about how these rules might affect you? I would be glad to talk things over with you.
AS ALWAYS, PLEASE FEEL FREE TO CALL TO DISCUSS THESE OR OTHER FINANCIAL SECURITY ISSUES OF CONCERN.
I’m Francine D. Ward, Attorney-At-Law.
Francine D. Ward
Attorney-At-Law, Author, Speaker
Follow Francine:
Don’t miss Francine’s Latest Blogs:
- Contract MistakesContract Mistakes Contract Mistakes. No Written Agreement.Probably the number one contract mistake people make is not having written agreements with everyone they do business with. I am always amazed by […]
- 31 Days of Estate PlanningEstate Planning Blogs Estate Planning Blogs. Have you ever wished there was one location to find basic information about estate planning? One location where you could get some definitions for […]
- Trust Mill ScamsDo You Really Want to Work? Five years ago, people complained they couldn’t find work. Today, there are so many jobs available, and no one wants to work. Instead, robbers, […]
- Probate Process — Basic StepsProbate Process Probate process basic steps. When someone passes away, their estate is generally required to go through probate unless there was a valid trust in place. It is a […]
- A Few Reasons Why Asset Protection is ImportantAsset Protection is Important. Why is asset protection important? First, to protect your assets, so they get into the hands of your intended beneficiaries, and to protect the most vulnerable […]
Don’t miss Francine’s Latest Blogs:
- Contract MistakesContract Mistakes Contract Mistakes. No Written Agreement.Probably the number one contract mistake people make is not having written agreements with everyone they do business with. I am always amazed by […]
- 31 Days of Estate PlanningEstate Planning Blogs Estate Planning Blogs. Have you ever wished there was one location to find basic information about estate planning? One location where you could get some definitions for […]
- Trust Mill ScamsDo You Really Want to Work? Five years ago, people complained they couldn’t find work. Today, there are so many jobs available, and no one wants to work. Instead, robbers, […]
- Probate Process — Basic StepsProbate Process Probate process basic steps. When someone passes away, their estate is generally required to go through probate unless there was a valid trust in place. It is a […]
- A Few Reasons Why Asset Protection is ImportantAsset Protection is Important. Why is asset protection important? First, to protect your assets, so they get into the hands of your intended beneficiaries, and to protect the most vulnerable […]
