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The Internal Revenue Service recently released a list offrequently asked questions and answers addressing various issuesrelated to the retirement plan distribution and loan provisions ofthe Coronavirus Aid, Relief, and Economic Security Act ("CARESAct"), enacted on March 27, 2020. In this article, we highlight themost 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 totheir retirement savings. Qualified individuals are individuals whoare diagnosed (or whose spouse or dependent is diagnosed) withCOVID-19 by a CDC-approved test, as well as individuals whoexperience 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 ofchild care or having a business they own or operate close or reducehours.
The CARES Act grants the Treasury Department and the IRS theauthority to issue guidance expanding the list of factors thatwould cause an individual to be considered a qualified individualas a result of experiencing adverse financial consequences.
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