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It sounds like you could pull $100k from a 401(k), move it to a Roth in something earning income, then remove income up to the Roth contribution truly tax free.

It sounds like you believe you can do a tax-free conversion. If that's the case, sorry, you're just wrong on this. The CARES Act provisions apply to withdrawals, not conversions.

And I'm not sure where you would have gotten the idea that an early withdrawal from your retirement plan would be tax-free. Can you please provide a cite for that? The 10% penalty for early withdrawal is being waived by the Feds (but not necessarily your state, if applicable), if you are diagnosed with the disease, or otherwise impacted by being laid off, furloughed, or your hours are reduced. But the withdrawal from a traditional account will still count as income, and will be taxed as such. You will have the opportunity to pay the taxes over a 3 year period, or to return the withdrawn amount to the plan within 3 years. But that's significantly different than being 'tax-free'.

I suppose if you have a Roth account in your retirement plan, you could take that money out tax-free. But you can already roll that money into a Roth IRA, and it already would have been tax-free, presuming you made qualified withdrawals.

Toss in the final 401(k) substantially equal distributions the tax year you turn 55 and there might be some nice early retirement potential if someone was well prepared prior to all our covid-19 losses to date.

The withdrawals if you leave your employer in or after the year you turn 55 are NOT SEPP (substantially equal periodic payment) withdrawals, unless your employer's plan requires them to be. What the age 55 rule does is waive the early withdrawal penalty for taking money out of the plan before you reach 59 1/2. As far as SEPP withdrawals, you can start SEPP withdrawals at any age. You must continue to take the SEPP withdrawals for a minimum of 5 years or until you turn 59 1/2, whichever is later.

To be more specific, imagine a situation where a hardship might credibly be called (wife laid off, cram down pay loss) but the $100k now in an IRA is not actually needed to pay bills and such. Then imagine the couple already have material past contributions to Roth IRAs. Now imagine moving capital from a 401(k) or IRA created from a rollover to a Roth in order to generate income. Do we know yet if this sequence works? Are details getting clarified now?

First of all, this already worked. It's called a conversion. You create the income by converting it from a Traditional account to a Roth account. You get taxed on the income. No need for clarification - conversions have been around for years. Unlike your earlier speculation, you cannot immediately turn around and pull the converted amount out of the Roth account tax-free, unless you meet the requirements for a qualified withdrawal from a Roth account. Each conversion must remain in the account for at least 5 years before the converted amount can be withdrawn tax and penalty-free.

What the CARES Act does not do is allow you to take the money out of a Traditional account without paying taxes on it.

What is the stated time frame for folks to consider moving monies, must it be completed in 2020 for example?

Yes, you can take money out of your retirement plan only during 2020 (at least at this point) and only if you have been impacted by being diagnosed with the disease, being laid off, being furloughed, being subject to a reduction in your hours, or are unable to go to work because you have to care for your child.

Is it accurate that monies need to move from a retirement account to the taxpayer and back to a retirement account within 3 years? How is that three year timer measured, please?

You have the opportunity to either move the withdrawn amount back into the plan or an IRA of the same type (Traditional or Roth) that the withdrawal came from over the 3 years from 2020 - 2022, to avoid taxes, rather than having to be returned to the plan in 60 days, like other non-trustee-to trustee rollovers.

Or, if you decide you don't want to return the money, and would rather pay the taxes, you can split up the taxes owed on the withdrawal, but you would need to complete the tax payment with your 2022 tax return. Details on specifically how these payments would have to occur are still be be provided, but paying the taxes would probably follow the pattern that was used when people were allowed to make conversions in 2010, and pay the taxes on that conversion with their 2011 and 2012 tax filings.

If there is a good primer on this, a link would be welcome. I speak finance and leagalese reasonably well.

Well, the primer on conversions is in IRS Pub 590-A https://www.irs.gov/pub/irs-pdf/p590a.pdf The primer on IRA withdrawals is IRS Pub 590-B https://www.irs.gov/pub/irs-pdf/p590b.pdf The primer on pension/retirement plan income is IRS Pub 575 https://www.irs.gov/pub/irs-pdf/p575.pdf And if you want general knowledge about the CARES Act (I don't think there's actually been a primer written yet), you can look at this Forbes article https://www.forbes.com/sites/bobcarlson/2020/03/28/ira-and-r... or you can go read the actual bill at this link https://www.congress.gov/bill/116th-congress/senate-bill/354...

AJ
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