I'm in the National Guard and will be deployed to a combat zone this year. My income is tax free when deployed. Under the Cares Act, can I withdraw from my 401K tax free?

[Opus 17]

Being deployed makes your Guard wages tax-free, it does not mean other income is tax-free (like income from selling stocks and bonds, selling your house, or taking a distribution from a 401(k).)

Additionally, to make a CARES act withdrawal, you must be able to certify one of the following conditions:

• You are diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention;

• Your spouse or dependent is diagnosed with SARS-CoV-2 or with COVID-19 by a test approved by the Centers for Disease Control and Prevention;

• You experience adverse financial consequences as a result of being quarantined, being furloughed or laid off, or having work hours reduced due to SARS-CoV-2 or COVID-19;

• You experience adverse financial consequences as a result of being unable to work due to lack of child care due to SARS-CoV-2 or COVID-19; or

• You experience adverse financial consequences as a result of closing or reducing hours of a business that you own or operate due to SARS-CoV-2 or COVID-19.

[dmertz]

And qualifying as a Coronavirus-Related Distribution only exempts you from the early-distribution penalty, not the tax on any portion not repaid within 3 years of receiving the CRD.