CARES Act Coronavirus-Related Distribution Provisions Expired
Under the CARES ACT in 2020, denominational retirement plan participants were temporarily able to apply for coronavirus-related distributions (CRDs) under certain government-described situations.
Participants had to self-certify.
Penalties and tax withholding were waived for coronavirus-qualified distributions from retirement plan accounts.
Provided the eligibility criteria are met, the CARES Act waived the 10% early withdrawal penalty that would have otherwise impacted those then employed and under age 59 1/2, and eliminated the 20% tax withholding for coronavirus-related distributions of up to $100,000 across qualified retirement plans and IRAs.
Note: While the 20% withholding would not have been automatically taken at the time of distribution, the distribution remained taxable. Participants requesting CRDs had the option to direct TIAA, the Plan's Recordkeeper, to withhold the percentage at the time of distribution or the participant would be able to pay taxes due over a three-year period. Participants were and are urged to consult with their personal tax advisor in order to be in compliance with all tax requirements.
Key Point: The Act allows participants to return CRD-withdrawn funds to the plan within three years of distribution regardless of that year’s contribution limit. This was meant to make it easier for participants to return the amount of any CRD to their retirement account.
Under the CARES Act provisions, CRD funds timely returned to the plan are not subject to income tax.
Contact TIAA by logging in to your account, or by calling TIAA at 800-842-2829. Be prepared to authenticate.