Coronavirus Related Distributions From Retirement Plans

Chris Wittich

Part of the CARES Act was establishing coronavirus related distributions from retirement plans.  The IRS recent came out with IRS Notice 2020-50 which provides a lot more insight for how those distributions are going to work and provided a lot of flexibility for taxpayers.  A link to the full notice is here

Lots of good information and examples in there, but let’s go through a couple of the big picture items.

  1. A bit more detail of who can claim a coronavirus related distribution
    1. Reduced pay or self-employment income
    2. Job offer rescinded
    3. Job start delayed
    4. Spouse or household member impacted
    5. Closing or reduced activity for a business owned by household member
  2. RMDs taken early in the year can subsequently be treated as coronavirus distributions
  3. Some ability for beneficiaries to count RMD as coronavirus distributions
  4. Election to spread coronavirus distribution income over 3 years made with the 2020 tax return
  5. Rules and examples for how repayment is treated when the income is spread over 3 years
    1. Payback reduces the income in the current year
    2. Payback that exceeds the income in the current year can either be carried back and done with an amended return or carried forward to offset future income
  6. Amended returns can be used to reduce income from coronavirus distributions if paid back in a subsequent year

I think this IRS notice has answered most of the questions regarding how these coronavirus distributions will work administratively so it’s worth a read if you’ve got a coronavirus distribution or reach out and we can go through your situation.  Contact me for more information at


Required Minimum Distributions Flexibility for 2020


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