Based on your description, yes. Certain taxpayers are permitted to withdraw up to $100,000 from a retirement plan or IRA for “coronavirus related distributions” without incurring the 10% premature distribution penalty.
A coronavirus-related distribution (PDF) includes a distribution:
- Made after Jan. 1, 2020 and before Dec. 31, 2020.
- To an individual who is diagnosed the with virus SARS-CoV-2 or COVID-19 by a test approved by the Centers for Disease Control and Prevention.
- To a spouse or dependent of a person diagnosed with such virus by such a test.
- To persons who experience adverse financial consequences as a result of being quarantined, furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury.
You can avoid the penalty, but you will still have to pay regular income tax on the distribution.
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