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It appears that when we try to select the coronavirus distribution for distributions taken prior to June 25, 2021, there is an error that coronavirus distributions can only be taken in 2020. However, there was an amendment to that rule:
The Consolidated Appropriations Act of 2021 (CAA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
Expanded Access to Penalty-Free Distributions
Effective for distributions made through June 25, 2021.
Qualified Disaster Distributions. Although the CARES Act provisions regarding “coronavirus-related distributions” (see below) expired on December 30, 2021, the CAA added a similar provision permitting “qualified disaster distributions, that are effective through June 25, 2021.
For purposes of the CAA, a “qualified disaster distribution” is any distribution made from 401(k) plan on or after the first day of the occurrence of a “qualified disaster” prior to June 25, 2021.
To qualify, the individual’s principal place of abode during the incident period must be located in a “qualified disaster area,” and the individual must have sustained an economic loss because of the disaster.
All fifty states and the District of Columbia have been designated as “qualified disaster areas” due to the pandemic, and the pandemic itself meets the statutory definition of “qualified disaster” pursuant to federal law.
The aggregate amount of distributions that may be treated as “qualified disaster distributions” for any tax year generally may not exceed $100,000.
The aggregate amount would seemingly include the amount of any “coronavirus-related distributions” under the CARES Act (see below) received in 2020
Is it possible to update the ProSeries software for 2021 so that the 2021 retirement distributions are not penalized for Covid Distributions?
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