My response: There are a list of factors in the statute and Notice 2020-50 that the taxpayer, his or her spouse, or a member of their household must meet for the taxpayer to qualify, including COVID-19 diagnosis or one of the listed adverse financial consequences. There is a long list. You need to verify each item in that list with the taxpayer. In my opinion, the thought they might meet one of the requirements in the future is not enough. I recommend one of the tax update classes I am taking to review this in depth.
From Beth on the other post: On the retirement distributions if they are under 59 1/2 to avoid the penalty what are the qualifying factors? I have a client that wants to do this but as I read it you must have been effected by being sick or loss of earnings from cutbacks or termination during 2020. He experienced neither. His investment advisor told him he would quality if he thinks he will be effected in 2021. I am curious about your take on this. Thanks.
My response: There are a list of factors in the statute and Notice 2020-50 that the taxpayer, his or her spouse, or a member of their household must meet for the taxpayer to qualify, including COVID-19 diagnosis or one of the listed adverse financial consequences. There is a long list. You need to verify each item in that list with the taxpayer. In my opinion, the thought they might meet one of the requirements in the future is not enough. I recommend one of the tax update classes I am taking to review this in depth.
From Beth on the other post: On the retirement distributions if they are under 59 1/2 to avoid the penalty what are the qualifying factors? I have a client that wants to do this but as I read it you must have been effected by being sick or loss of earnings from cutbacks or termination during 2020. He experienced neither. His investment advisor told him he would quality if he thinks he will be effected in 2021. I am curious about your take on this. Thanks.
Thank you for doing this Tom. I look forward to reading each and every one.