{"id":51095,"date":"2020-04-28T20:32:15","date_gmt":"2020-04-29T01:32:15","guid":{"rendered":"https:\/\/resource-center.hrblock.com\/?p=51095"},"modified":"2023-01-30T14:15:53","modified_gmt":"2023-01-30T20:15:53","slug":"simple-sep-ira-withdrawals-coronavirus","status":"publish","type":"post","link":"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/income\/retirement-income\/simple-sep-ira-withdrawals-coronavirus\/","title":{"rendered":"SIMPLE-IRA and SEP-IRA withdrawals offer relief from coronavirus financial impacts"},"content":{"rendered":"

Across the United States, the coronavirus crisis continues to affect the lives and livelihoods of millions of small business owners. In response to the health and financial emergency, Congress has passed the CARES Act<\/a>, a $2 trillion relief package. While most of the bill focuses on its loan and tax-related relief provisions for small businesses, a lesser known part of the law can give you access to up to $100,000 by way of a penalty free withdrawal from your SIMPLE-IRA or SEP-IRA in certain circumstances.<\/p>\n

If you\u2019re a struggling small business owner who holds a SIMPLE or SEP-IRA<\/a>, you might be considering dipping into these funds to make ends meet during this difficult time. In this article, we\u2019ll walk you through the rules and considerations associated with taking a withdrawal from your SIMPLE-IRA or SEP-IRA.<\/p>\n

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Is it a withdrawal or more of an emergency loan from your SEP\/SIMPLE-IRA?<\/h2>\n

First, we should clarify whether we\u2019re talking about a withdrawal or an emergency loan. Where IRAs are concerned, you can really only take a withdrawal from your account. This is because \u201cloans\u201d from a SEP or SIMPLE-IRA are not permitted. Retirement account loans are typically associated with 401(k) Plans.<\/p>\n

However, the penalty-free withdrawal provisions created by the CARES Act may seem like a loan as they let you take money out and pay it back to your account later. Let\u2019s jump into the details of what the SIMPLE-IRA and SEP-IRA withdrawal rules entail.<\/p>\n

Who can take SIMPLE-IRA and SEP-IRA penalty-free withdrawals?<\/h2>\n

The new law states that you can take a penalty-free distribution, up to $100,000 from your SIMPLE or SEP-IRA, if one of the following situations apply:<\/p>\n