Does a financial hardship due to reduction in pay without a reduction in work hours make a participant qualified to take a coronavirus-related distrution?

The CARES Act frames the qualifying ‘adverse financial consequences’ as follows:

“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 reducing hours of a business owned or operated by the individual due to such virus or disease.”

On June 19, the IRS provided additional guidance which included reduction in pay or self-employment income due to the pandemic in the definition of financial hardship for purposes of identifying qualified individuals.

For a complete list of qualified individuals, see Who is eligible to take a coronavirus-related distribution?

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Cetera Retirement Plan Specialists is a third-party administrator and may not offer tax, legal or investment advice. Plan sponsors should consult their own tax, legal or investment professionals.