Because you were affected by COVID-19, you were permitted to withdraw up to $100,000 from your 401K without paying an early withdrawal penalty.
The income is still taxable, but the penalty for withdrawing the income before the age of 59-1/2 was waived for distributions made by December 30, 2020.
The taxes on the distribution can be spread out over a three year period. You can also put the money back into your retirement plan within three years and undo the tax consequences by filing an amended tax return.
COVID Tax Relief
