The CARES Act was passed last year in response to the COVID-19 pandemic, and the bill included a number of temporary changes and exceptions to the tax laws regarding retirement and education accounts.
For example, the CARES Act waived the early withdrawal penalty for withdrawals from tax-deferred retirement accounts — but if the money isn’t paid back into the account within three years it will be considered taxable income, spread out over three years and starting with your 2020 return.
This communication is for informational purposes only. No content or reference to a third-party article is intended to be a recommendation for the sale or investment in any product, strategy or service nor should it be perceived as individual advice. This commentary does not necessarily reflect the opinions of all employees or XML Financial Group and its affiliates (“XML”). XML is not responsible for any actions taken related to this information.
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