Frequently asked questions


  Coronavirus-related withdrawal

Cash withdrawal
There are several differences between a standard cash withdrawal and a coronavirus-related cash withdrawal. For a standard cash withdrawal, your cash availability is based on your plan rules. Regular cash withdrawals have a mandatory 20% tax withholding. Additionally, if you are under 59½, there may be a 10% early withdrawal penalty.
 
Coronavirus-related withdrawal
To qualify for a coronavirus-related withdrawal, you must meet specified requirements, which allow you to request funds up to $100,000 or 100 percent of your vested account balance. Additionally, unlike a standard distribution, a coronavirus-related withdrawal offers the benefit of not being subject to the 10% early distribution tax or mandatory 20% withholding.

Coronavirus-related withdrawals must be initiated prior to December 31, 2020.

If you qualify for a CARES Act withdrawal, there is no limit to the number of withdrawals you may take. Please note the total amount of distributions an individual may receive as coronavirus-related distributions shall not exceed $100,000 across all retirement plans. If total amounts reported on your 2020 1099R exceeds the $100,000, the excess amounts will be taxed as ordinary income and may be subject to the 10% early withdrawal penalty.

Yes, funds may be returned to an eligible account over the course of the three-year period following the withdrawal. Funds returned within that time frame will be treated as an indirect rollover and will not be subject to taxation. Taxes due on funds not returned to an eligible account may be spread over a three-year period.


  Loans

Coronavirus-related loan
The CARES Act allows you, provided you satisfy the coronavirus-related qualification requirements, to take funds above your current limit through September 22, 2020. Standard loan repayment schedules will apply. Under this provision, you may defer outstanding 2020 loan payments, with interest, for a period of one year. New loan payments are not automatically suspended; additional action will be required once the loan is issued.
 
Coronavirus-related withdrawal
The CARES Act allows you, provided you satisfy the coronavirus-related qualification requirements, to withdraw funds up to $100,000 or 100 percent of your vested account balance. Plan rules may limit the amount that can be withdrawn from a particular plan. The provision allows you to opt out of the standard 20% federal tax withholding. Additionally, if you are under 59½, the 10% early withdrawal penalty is waived by the IRS.

If you default on a loan, it may affect loan availability, per your plan's rules. For further questions about the status of your defaulted loan, please call our CARES team at 855-400-4294 to speak with a consultant.

Coronavirus-related loans may only be taken between March 30, 2020 and September 22, 2020.

You may delay loan payments until December 31, 2020. Payments will begin again in January 2021.

Should you defer your loan, payments will begin again in January 2021. Interest will continue to accrue during the loan deferral period and the loan will be re-amortized to reflect the interest accrual and new payment dates.

Your loan limits are subject to your plan's rules. For further questions about loan eligibility, please call our CARES team at 855-400-4294 to speak with a consultant.