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The Internal Revenue Service recently released a list of frequently asked questions and answers addressing various issues related to the retirement plan distribution and loan provisions of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), enacted on March 27, 2020. In this article, we highlight the most significant guidance contained in the FAQs.

Retirement plan provisions of CARES Act

The CARES Act made a number of changes to federal law to afford "qualified individuals" affected by COVID-19 greater access to their retirement savings. Qualified individuals are individuals who are diagnosed (or whose spouse or dependent is diagnosed) with COVID-19 by a CDC-approved test, as well as individuals who experience adverse financial consequences as a result of COVID-19, including as a result of being quarantined, furloughed or laid off, having work hours reduced, being unable to work due to lack of child care or having a business they own or operate close or reduce hours.

The CARES Act grants the Treasury Department and the IRS the authority to issue guidance expanding the list of factors that would cause an individual to be considered a qualified individual as a result of experiencing adverse financial consequences.