@kengelhardt8 wrote:
According to Jamie Hopkins at Forbes, it seems the new legislation does allow for a early penalty free withdrawal as a "Qualified Disaster Distribution." Refer below. It seems it expires in late Feb. However, am I reading this wrong?
You're going to need a lawyer, or wait for IRS guidance. The actual enacted law is very strange. I'm looking at Title III beginning on page 4956 of this PDF.
https://www.winston.com/images/content/2/2/v2/227269/Consolidated-Appropriations-Act-2021-unsigned-v...
Section 301(1)(A) says that a qualified disaster area is any area declared as a disaster by the President between January 1, 2020 and 60 days after the enactment of the law. That seems to mean that the provisions only apply to disaster that are declared between 1/1/2020 and about 2/28/2021. And the disaster itself must have occurred between 1/1/2020 and the date the bill was enacted (signed into law).
Section 301(1)(B) specifically says that the term, "qualified disaster area" does not apply to any place where a disaster was declared solely due to COVID-19.
Then section 302 restates the same rules as in the CARES act (no 10% penalty, 3 year repayment) for distributions taken due to a qualified disaster.
So unless my understanding of the English language is seriously flawed or there is some other counter-acting language in the bill, the special withdrawal rules only apply to disasters declared between 1/1/2020 and 2/28/2021 and do not include COVID as a disaster.
