The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law by President Trump on March 27, 2020. The lengthy bill includes emergency distribution and loan options aimed at providing coronavirus affected plan participants with financial relief.  Participants can self-certify they have been affected.


The CARES Act includes the following changes to related to coronavirus related distribution and loans made before December 31, 2020. Plan sponsors choosing to enable the CARES Act provisions can allow them now; however, CARES Act amendments do not need to be adopted until the end of 2022.


Distributions (includes IRA distributions): Favorable Tax Treatment

            -Distributions up to $100,000 allowed

            -10% early withdrawal penalty waived

            -Exempt from mandatory 20% federal withholding

            -Taxation can be spread out over 3 years

            -Distribution can be paid back over 3 years without tax consequences


Loans: Maximums Increased

-Maximum loan amount increased to the lesser of $100,000 or 100% of participant’s vested       account balance

-Maximum increase applies to loans issued 180 days after CARES Act signed

-Payments due between 3/27/2020-12/31/2020 can be delayed for 1 year

-Delayed payments can extend the loan payoff date by the respective missed/delayed payments


Required Minimum Distributions (RMD)

-Any RMD required in 2020 can be delayed for 1 year

-Delayed RMDs do not have to be related to the coronavirus


S. 3548- 116th Congress, The CARES Act defines that an affected coronavirus related participant is an individual, spouse or dependent:


(I) who is diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention,


(II) whose spouse or dependent (as defined in section 152 of the Internal Revenue Code of 1986) is diagnosed with such virus or disease by such a test, or


(III) who experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury (or the Secretary's delegate).


The bill in its entirety can be viewed here:


We are in this together and are here to help. Our team of 401(k) professionals, financial advisors, and tax professionals can navigate you through this difficult time. Please contact Chuck White at or Casey Gustafson at for more information or if you have any questions.  They can also be reached at 952-893-9320.