Nonqualified distributions from a Roth 401(k) are a proportionate mix of contributions and earnings. As with any nonqualified distribution from a Roth 401(k), only the earnings portion of a Coronavirus-Related Distribution (CRD) that is a nonqualified distribution is taxable. Qualified distributions (after having had the account for 5 years plus, generally, having reached age 59½) are entirely nontaxable, CRD or not.
A CRD from a Roth 401(k) can be rolled back into the Roth 401(k) or over to a Roth IRA within 3 years of the date of the distribution. The rollover consists first of the earnings portion of the distribution, so if all of the distributed earnings are rolled over, the tax on the distribution will be eliminated.
A distribution from a retirement account is not compensation which qualifies one to make a new contribution to an IRA. The cash from a CRD can be used for any purpose, so it could be used to subsidize a Roth IRA contribution provided that the individual is eligible to make a Roth IRA contribution based on actual compensation.
