Special rules provided by CARES Act Sec. 2202 for corona virus related distributions include:
- IRC Sec. 72(t) penalty provisions do not apply to the distribution(s). This includes the 25% additional tax for certain distributions from SIMPLE IRAs.
- Mandatory 20% federal income tax withholding does not apply.
- Unless the taxpayer elects otherwise, any amount required to be included in gross income in 2020 will be included ratably over the 3-taxable year period beginning in 2020. In other words, one-third in 2020, one-third in 2021 and one-third in 2022.
- Certain distributions may, at any time during the 3-year period beginning on the day after the date the distribution was received, be re-contributed to an eligible retirement plan account or IRA account. Any amount recontributed during the 3-year period is treated as a tax-free rollover and is not includible in income.
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https://www.irs.gov/pub/irs-drop/n-20-50.pdf