Tax Briefs

2020 Required minimum distributions (RMD) are waved in 2020 – You can take them, but if you choose not to you will not be penalized.

The Act allows for individuals to withdraw up to $100,000 from their qualified retirement plan through the end of 2020. The distribution may be treated as a non- taxable rollover IF the taxpayer is able to pay the funds back equally over the next three years.  The distribution is not subject to the 10% penalty, and if not paid back in the three years, would be subject to federal income tax. 

To qualify…

• you either have to have been diagnosed with COVID-19;
• or have a spouse or dependent who was diagnosed with COVID-19;
• or are experiencing adverse financials consequences from quarantine, furlough, layoff or reduced hours due to the coronavirus;
• or are unable to work due to the lack of child care. 

**Employees are allowed to self-certify their eligibility, which is a distinction from hardship withdrawals in the past as proof of the hardship was required.

A few additional points to consider:

• If you are not able to pay back the funds again, the amount withdrawn is taxable but not subject to penalty…which depending on timing may require an amendment of tax returns to pick up the distribution as taxable.
• You can also take more favorable loans against your retirement plans if you qualify.
• Investment portfolio decreases do not currently qualify under the “Financial Hardship”.

We highly advise you to discuss this with your financial advisor, plan administrator and your CPA to consider your particular situation and to verify if you qualify (if you choose to go this route). It is recommended that withdrawing from your retirement funds to be your last resort.  This is based on information we have today, and with things changing so frequently as of lately, we just like to note that it is important to talk before moving forward.

Stay healthy and we look forward to talking with you soon. 

Please call us if you have any questions or concerns:

• Cody (Keven Buss & Tim Poley):  307-527-6161
• Powell (Reanne Wolff):  307-754-1010
• Worland (Gary Wantulok):  307-347-4555