401k, Covid and Qualification

[kylere1]

Good Day, 

My wife and I moved 100 miles in January 2020 and I had to leave my employer.  I closed out my 401k (under $100k). I had intended to move it to another fund, but local employment chances dropped with the pandemic and we ended up needing it.   I did not originally intend it as a Cares distribution but it ended up being one.  Do I qualify as a coronavirus-related distribution under(CARES Act §2202(a)(4)) even if it was not my original intent?

[RayW7]

Yes you would qualify if you meet any of the requirements below.

Listed below are qualifications for a qualified individual for purposes of section 2202 of the CARES Act?

You are a qualified individual if –

• 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.

-for additional information follow this link-

Coronavirus-related relief for retirement plans and IRAs ...

[kylere1]

That is how I am reading it too.  I was a soldier so it makes me nervous whenever it seems straightforward. 

[DawnC · Accepted solution]

Yes, as long as you qualify per the above, you qualify to use the covid related tax relief provided through Form 8915-E.   A coronavirus-related distribution is a retirement plan distribution that was made:

1. In 2020 before December 31, 2020; and

2. To a qualified individual - see requirements in the above post.

If (1) and (2) apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a coronavirus-related distribution, regardless of why the distribution was made.  Coronavirus-related distributions are permitted without regard to your need.   Thank you for your service!