1099r

[rjw0831]

I received a 1099 R at the end of January 2020 (pre-covid). I was unemployed at this time as I was let go from my prior employment. Does being laid off qualify as for 2020 disaster relief?

Thank you in advance. 

[RayW7]

When the COVID pandemic hit and unemployment soared in 2020, Congress passed the CARES Act, which gave special tax treatment for eligible withdrawals from retirement accounts. The usual 10% penalty on early withdrawals before age 59-1/2 is waived.

-follow this link for additional information-

2021 Stimulus: Tax Relief for This Year's Taxes - TurboTax ...

-regarding unemployment, follow this link-

Unemployment Stimulus: Am I Eligible for the New ...

[rjw0831]

Thank you RayW7 for the prompt response. I appreciate it. My distribution occurred prior to Covid. Does this matter?

[LenaH]

Yes. The exclusion only applies if you had to take money from your retirement plan if you are a qualified individual impacted by coronavirus.

You are a qualified individual if:

• You, your spouse, or dependent are diagnosed with COVID-19
• You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off
• You had hours reduced due to coronavirus
• You are unable to work due to your child care closing or reducing hours.

Since you took the distribution prior to Covid-19, then you would not qualify. 

@rjw0831

[rjw0831]

Thank you Lena