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Submitted By: someone
Answered: May 3, 2021 11:01 pm
Answered: May 3, 2021 11:01 pm
I was not working in 2020 and took money from my retirement plan to live on. Do I have to pay taxes on this money?
Yes. However, if the distribution from a qualified retirement plan or IRA is a “coronavirus-related distribution,” then no 10% penalty applies for anyone under age 59½. What’s more, a coronavirus-related distribution may be redeposited in the same or other retirement account within three years, allowing for a recovery of taxes paid on the distribution.
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Tax Glossary
Market discount
The difference between face value of a bond and lower market price, attributable to rising interest rates. On a sale, gain on the bond is generally taxed as ordinary income to the extent of the discount.
