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Returning Member

401K Covid Distribution



I had taking out a distribution when I was furlough from my company and eventually was laid off.  I was fortunate to land another job after 5 months of looking.  Now I am able pay back the distribution, however when I contacted the previous employer they told me I couldn't since I no longer work there.  My current employer told me I couldn't add to their 401k.   My question is can I add the money back to an existing traditional IRA?  I know I'll need to amend my 2020 tax return because I had selected the option to split the taxes over three years.  is there a way I can put the money back to a retirement account?






2 Replies
Level 15

401K Covid Distribution

My question is can I add the money back to an existing traditional IRA?   YES you can.  

Opus 17
Level 15

401K Covid Distribution

You can put the money into any qualified plan.  Make sure to tell the plan in advance that this is a repayment of a COVID distribution (a special type of rollover), and is NOT a regular contribution.  You may need to sign a form or make other special arrangements, especially since the money is not going back into the original plan.  If the payment is recorded as a new contribution, it will be subject to contribution limits and you won't get the tax benefits of returning the money under the CARES act. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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