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June 22, 2020

Do you qualify for the Qualified Individual-Coronavirus-Related Distribution? Learn if you do.

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Qualified Individual-Coronavirus-Related Distribution

Qualified Individual- Coronavirus-Related Distribution

A qualified individual is one who is eligible to take a coronavirus-related distribution, and maybe any of the following:

An individual:

  • who is diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (referred to as COVID-19) by a test approved by the Centers for Disease Control and Prevention (including a test authorized under the Federal Food, Drug, and Cosmetic Act);
  • whose spouse or dependent is diagnosed with COVID-19 by a test approved by the Centers for Disease Control and Prevention (including a test authorized under the Federal Food, Drug, and Cosmetic Act; or
  • who experiences adverse financial consequences as a result of:
    • the individual being quarantined, being furloughed or laid off, or having work hours reduced due to COVID-19;
    • the individual being unable to work due to lack of childcare due to COVID-19; or
    • closing or reducing hours of a business owned or operated by the individual due to COVID-19.

In addition, a qualified individual is an individual who experiences adverse financial consequences as a result of: 

  • the individual having a reduction in pay (or self-employment income) due to COVID-19 or having a job offer rescinded or start date for a job delayed due to COVID-19;
  • the individual’s spouse or a member of the individual’s household (as defined below) being quarantined, being furloughed or laid off, or having work hours reduced due to COVID-19, being unable to work due to lack of childcare due to COVID-19, having a reduction in pay (or self-employment income) due to COVID-19, or having a job offer rescinded or start date for a job delayed due to COVID-19; or
  • closing or reducing hours of a business owned or operated by the individual’s spouse or a member of the individual’s household due to COVID-19.

For purposes of applying these additional factors, a member of the individual’s household is someone who shares the individual’s principal residence

Cite: Section 2202(a)(4)(A)(ii) of the CARES Act; IRS Notice 2020-50

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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