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Congress passed The CARES Act, and late Friday (March 27th), the President signed it into law.  Below are key provisions that may benefit some of your participants:


  • A new emergency distribution option from plan balances is allowed, the “coronavirus related distribution (CRD).”  A CRD can be drawn in any amount up to $100,000.  Key terms:

    • 10% penalty tax on early plan distributions is waived.

    • Individual taking a CRD can spread the reported income over three years for tax purposes.

    • The distribution can be repaid within three years to avoid taxation.

    • Participants must self-certify that they either have COVID-19, that a spouse or dependent has COVID-19, or that they have lost a job/been furloughed/have reduced hours because of the coronavirus pandemic.

  • The maximum allowable loan amount was increased from $50,000 to $100,000.

  • RMDs are waived for 2020.

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