Details of Public Law 116-136, section 2202 , Special Rules for Use of Retirement Funds

California conforms to IRC section 72(t), additional tax on early distributions from qualified plans tax as applicable for federal purposes for the same taxable year using a rate of 2 1/2% in lieu of the federal tax rate. The COVID-19 early distributions would not be subject to a California early withdrawal tax if they are not subject to the federal additional tax on early distributions.(RTC section 17085(c))

RTC section 17081 conforms to federal law regarding loans from qualified plans as of 1/1/2015, and generally allows a qualified employer plan, to provide specified loans to a participant or a beneficiary that are not treated as taxable distributions from the plan if specified conditions are met.

AB 276 was chaptered on 9/11/2020 to conform to Section 2202(b) of the federal CARES Act, relating to qualified retirement plan loans.

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