The UU Retirement Plan adopted the CARES Act Coronavirus-Related Distribution Provisions
The following information was created on April 9, 2020 during a time of rapid change. Please join us across the miles, in taking several moments to invite a calm approach to the information newly emerging.
Relief provisions give our participants flexibility as they face tough financial decisions during this crisis.
Taking funds from your retirement plan at this time will, of course, impact your long term financial security and should only be done after careful consideration of all options available to you.
Those without an urgent need to access their retirement plan savings are encouraged to maintain focus on their long-term saving goals and strategies.
Who is eligible?
You are considered eligible to take coronavirus-related distributions (CRDs) described below if any of the following conditions are met:
• You have been diagnosed with COVID-19 by a test approved from the Centers for Disease Control and Prevention
• You have a spouse or dependent who has been diagnosed with COVID-19
• You suffer financial consequences as a result of quarantine, employment furlough, layoffs, reduced work hours or cannot work due to lack of child care as a result of coronavirus
• You experience a financial loss to an individually owned or operated business that is caused by a closing or reduction of hours due to coronavirus
• Other factors as determined by the Secretary of the Treasury or their delegate
Note: Participants must self-certify that they’re impacted.
How can the act help if you are eligible?
Penalties and tax withholding are waived for coronavirus-qualified distributions from retirement plan accounts.
Provided the eligibility criteria are met, the CARES Act waives the 10% early withdrawal penalty that would otherwise impact those currently employed and under age 59 1/2, and eliminates the 20% tax withholding for coronavirus-related distributions of up to $100,000 across qualified retirement plans and IRAs.
Note: While the 20% withholding will not be automatically taken at the time of distribution, the distribution remains taxable. You have the option to direct TIAA to withhold the percentage at the time of distribution or you may pay taxes due over a three-year period. We suggest you consult with your personal tax advisor in order to make a plan based on your particular circumstances.
Key Point: The Act allows you to return withdrawn funds to the plan within three years regardless of that year’s contribution limit, making it easier to replace the amount of your distribution in your retirement account.
Note: The funds timely returned to the plan will not be subject to income tax.
Contact TIAA by logging in to your account, or by calling TIAA at 800-842-2829. Be prepared to authenticate.