I don't think that will work. Your current retirement plan contribution amounts are coming out pre-tax. In turn, if you want to use those also to decrease the amount of your taxable Covid distribution, you would be double dipping by getting deferred tax treatment on both the lowering of your taxable wages up front and decreasing the taxable amount of your Covid distribution. In order to gain the benefit of not including the taxable distribution in income, you would need to use after tax dollars.
