Penalty Waived for Early Retirement Withdrawal
If you need to take money out of your retirement plan ASAP, keep in mind that the 10 percent early withdrawal penalty may be waived on up to $100K of retirement funds withdrawn if you are a qualified individual impacted by Coronavirus. You are a qualified individual if:
- You, your spouse, or dependent are diagnosed with Coronavirus
- You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off
- You had hours reduced due to Coronavirus
- You are unable to work due to your child care closing or reducing hours
Additionally, income attributable to such distributions would be subject to tax over three years, and you may recontribute the funds to an eligible retirement plan within three years without regard to that year’s cap on contributions.
Please read this TurboTax article.
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