I qualified for a CARES act 401k withdrawal, and took out $65,000. I will be paying the taxes associated with this distribution in even increments in 2020, 2021, and 2022. Normally I would not anticipate owing >$1,000 and therefore no concern with underpayment penalty. However, the addition of the taxes related to the CARES withdrawal will no doubt push me beyond owing more than $1000. Does this mean I should be making estimated payments, or are COVID related distributions exempt from underpayment penalty?
