Do You Need To Access IRA Savings?

April 22, 2020

Ordinarily, people with savings in IRA accounts who withdraw money before age 59 1/2 must pay a 10% penalty. This makes it more difficult to use those IRA savings in an emergency. These are not ordinary times. Under the new CARES Act, people who need to withdraw funds from IRA accounts due to the financial impact of COVID-19 can take a penalty-free “hardship distribution” of up to $100,000. Hardship distributions without penalty are available regardless of the age of the account owner. Of course, penalty-free doesn’t mean tax-free. If you do not repay the amount withdrawn within 3 years, you will generally owe income tax on the distribution. Other rules and restrictions may apply. Ask us about this and other CARES Act tax provisions. We are here to help.