2019 IRA/ESA Contribution Deadline Extension

The U.S. Department of Treasury and the IRS provided special federal income tax return filing and payment relief in response to the ongoing coronavirus disease (COVID-19) emergency. Below is a summary of the retirement plan highlights of this guidance.

Any person with a federal income tax return or payment due on Wednesday, April 15, 2020 is eligible for relief under the notice. You do not have to be sick, or quarantined, or have any other impact from COVID-19 to qualify for relief. You only need to have a federal income tax return or payment due on April 15, 2020.
Because the due date for filing federal income tax returns has been postponed to Wednesday, July 15, 2020 the deadline for making contributions to your IRA for 2019 is also extended to July 15, 2020.
All Apex systems have been updated to accommodate the extension of the deadline to July 15, 2020.

CARES Act Retirement Account Provisions:

The following provisions are intended to help individuals affected by COVID-19 to access their IRA and retirement plan assets, and to replenish those assets later on.

A: New coronavirus-related distributions (CRDs)

Individuals may withdraw up to $100,000 in aggregate from eligible retirement plans without paying the 10 percent early distribution penalty tax.

A CRD is defined as a distribution made on or after January 1, 2020, and before December 31, 2020, to a qualified individual, defined as

1. an individual (or the spouse or dependent of the individual) who is diagnosed with the COVID-19 disease or the SARS-CoV-2 virus in an approved test; or

2. an individual who experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reduced hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Treasury Secretary.

How to distribute funds？

1. Download the distribution form. You can download the distribution form on APP>Account Page>More>Distribution>Distribute Via Wire/Check page. The form will send to your Email when you click download.

2. Print and fill out the form, and then send an electronic copy (or photo) to Webull's designated mailbox.

3. In order to ensure your successful distribute funds, please pay attention to the following 4 requirements:

a. You need to fill in the remark “This distribution qualifies as a coronavirus-related distribution as defined in the CARES Act” in any blank space of the form.

b. When filling in the Distribution Type, please check Normal (59 1/2 for optional) or Premature Distribution (59 1/2 for optional).

c. CRDs will meet the retirement plan distribution requirements, as long as total distributions from all IRAs and other employer plans do not exceed $100,000.

d. Although the 10% tax penalty is not applicable for early withdrawal of CRDs, you still need to report federal and state tax withholding options in the distribution form

How to contribute funds？

For the distribution of CDRs, you can choose to re-deposit to your IRA account or other eligible pension accounts within 3 years (from the next day after CRD withdrawal). Please note that the "Contribution Type" must select "60-day Rollover".

Tax payment instructions

For taxation of CRDs withdrawals, the Internal Revenue Service will collect them annually according to a certain percentage within three years.

B: Waiver of RMDs in, or for, 2020

The CARES Act waives the required minimum distribution (RMD) in 2020 for plan participants, IRA owners, and beneficiaries.

RMDs normally required to be taken for 2020 are waived.
This waiver also applies to individuals who turned 70½ in 2019 but who did not take their first RMD before January 1, 2020.
For purposes of counting the five-year period for beneficiary distributions, 2020 is disregarded and one year is added to the remaining period. For example, for deaths occurring in 2019, the five-year period in which the inherited assets must be distributed will end on December 31, 2025, instead of on December 31, 2024.
A distribution that is taken in 2020—but that is not an RMD because of the waiver—may be rolled over to another eligible retirement plan or to an IRA within 60 days of the distribution(60-Day Rollover).