I'm considering adding the full amount into my IRA for 2019. Considering everything regarding COVID-19 and Tax Guidelines, If I had to make deductions from my IRA because I needed the funds, is their no penalty right now? Or would I be fully penalized?
Thank you
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Please clarify - you say "add to" and take distributions. Which is it?
To be a COVID-19 distribution made in 2020 then you must qualify.
[quote from IRS]
A3. You are a qualified individual if –
Under section 2202 of the CARES Act, the Treasury Department and the IRS may issue guidance that expands the list of factors taken into account to determine whether an individual is a qualified individual as a result of experiencing adverse financial consequences. The Treasury Department and the IRS have received and are reviewing comments from the public requesting that the list of factors be expanded.
I guess what I mean by add to is “contributions”. If I make the full Contribution amount ($6000) for 2019 am I eligible to make deductions on that if needed without penalty (I’m 41) because of any rule changes made after Covid-19. In other words, can I use that money if needed without Penalty?
You can contribute to a Traditional IRA for 2019 and deduct it if you are qualified for a deduction. If withdrawn you must pay the normal tax plus 10% penalty if under age 59 1/2 unless it is withdrawn in 2020 and you meet the above requirements for a coronavirus related distribution. It would make little sense to make such a contribution only to withdraw it within 5 months.
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