On March 27, 2020, the Coronavirus Aid, Relief and Economic Security – CARES – Act was passed.
Through it, 401(k), 403(b), governmental 457(b), and certain other retirement plans will begin offering early distribution for COVID-19 related issues on or before Dec. 31, 2020. These distributions will not be subject to the early withdrawal tax penalty. They also will not be subject to mandatory 20% withholding that often applies to distributions, and income tax resulting from the withdrawals can be spread over three tax years.
The act also expands unemployment insurance and gives borrowers with home and student loans more time to make payments.
– Trevor Wilde, Wilde Wealth Management Group