As businesses and individuals continue to feel the financial impacts of the COVID-19 pandemic, some taxpayers might be considering tapping into their tax-qualified retirement accounts, either to keep their businesses operating or to meet personal cash needs. Certain provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act made this strategy more accessible for many taxpayers.
Business owners, plan administrators, and individual taxpayers considering such a move should familiarize themselves with the CARES Act’s special rules, as well as the general advantages and disadvantages of using retirement accounts to manage temporary cash shortfalls. (more…)