The CARES Act & Retirement Accounts


The recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act brings new options and changes regarding access to retirement funds.  We offer highlights of the newly enacted rules to help you understand your options.

Early Withdrawals

Special rules regarding distributions from qualified retirement plans, including IRAs and certain employer-sponsored plans, have been enacted. Highlights include:

  • Increased withdrawal limits of up to $100,000 (based on account balance)
  • Waiver of the 10% early-withdrawal penalty
  • Distributions are exempt from the mandatory 20% tax withholding requirement
  • Repayment within three years will be treated as a tax-free rollover
  • If not repaid, the distribution will be taxed over three years
  • Coronavirus-related distribution may only be taken if:
    • You, your spouse or dependent have been diagnosed with the coronavirus
    • You’ve experienced adverse financial consequences as a result of being quarantined, furloughed or laid off, or your work hours have been reduced
    • You’re unable to work because of a lack of childcare
    • You’ve had to close or reduce the hours of a business as a result of the virus
    • You’ve been financially impacted by other factors determined by the Treasury Secretary

Please note that certain limitations may apply. Saving for retirement is an important aspect of personal financial wellness and tapping into your retirement savings is likely to have an impact on your overall retirement readiness. For questions regarding your Huntington IRA, please contact your Huntington representative.

Updated Loan Provisions

Increased loan flexibility from tax-qualified retirement plans (if loan option is offered through an employer-sponsored plan). Updates include:

  • Maximum loan amount increased to $100K (or 100% of vested account balance)
  • Applies to loans made beginning on March 27, 2020
  • Loan payments due between March 27, 2020 and December 31, 2020 will be delayed for one year

Please note that certain limitations may apply. For questions regarding loan availability from your employer-sponsored plan, please contact your employer or retirement plan provider.

Required Minimum Distributions

Waiver of Required Minimum Distributions (RMDs) for 2020 for IRAs as well as certain employer-sponsored defined contributions plans. This includes:

  • 2020 RMDs that would normally be due by December 31, 2020
  • For those individuals who turned 70 ½ in 2019 and who also deferred all or part of their initial RMD, the waiver extends to 2019 RMDs that would normally have been due by April 1, 2020
  • With certain limitations, RMDs that occurred in 2020 may be eligible to be returned or rolled over into an IRA or other qualified retirement plan

Consult with your legal and/or tax advisor before taking action. Decisions about accessing or preserving retirement savings can be complex. Huntington is here to help. For information regarding your Huntington IRA, please contact your Huntington representative.

IRA Contribution Deadline Extension

Deadline for 2019 IRA contributions has been extended to July 15, 2020 to align with the extended date for filing federal income tax returns.

Consult your legal and/or tax advisor regarding certain limitations that may apply. Huntington is here to help. For information regarding your Huntington IRA, please contact your Huntington representative.


Huntington Financial Advisors® is a service mark and trade name under which The Huntington Investment Company offers securities and insurance products and services. The Huntington Investment Company is a registered broker-dealer, member FINRA and SIPC, and registered investment advisor with the U.S. Securities and Exchange Commission (SEC). The Huntington Investment Company is a wholly-owned subsidiary of Huntington Bancshares Incorporated.

 

Certain insurance products are offered by Huntington Insurance, Inc., a wholly-owned subsidiary of Huntington Bancshares Incorporated, and underwritten by third-party insurance carriers not affiliated with Huntington Insurance, Inc.

 

Trust and investment management services are provided by The Huntington National Bank, a national bank with fiduciary powers. The Huntington National Bank is a wholly-owned subsidiary of Huntington Bancshares Incorporated.