Client has base salary and commisions. His base salary did not go down due to Covid but lost
commisions, Do commisions count toward thier income so he can qualify for th 10% exemption for a 401 k withdrawal
This notification came by email today:
"Relief for taxpayers affected by COVID-19 who take distributions or loans from retirement plans
Notice 2020-50 is intended to help retirement plan participants affected by the COVID-19 coronavirus take advantage of the CARES Act provisions providing enhanced access to plan distributions and plan loans. This relief includes expanding the categories of individuals eligible for these types of distributions and loans and providing guidance and examples on how qualified individuals will reflect the tax treatment of these distributions and loans on their federal income tax filings.
As authorized under the CARES Act, Notice 2020-50 expands the definition of who is a qualified individual to take into account additional factors such as reductions in pay, rescissions of job offers, and delayed start dates with respect to an individual, as well as adverse financial consequences to an individual arising from the impact of the COVID-19 coronavirus on the individual’s spouse or household member.
For more information about this tax relief and other information related to the effects of COVID-19 on federal income tax, visit the IRS Coronavirus Tax Relief pages of IRS.gov."
"Level Up" is a gaming function, not a real life function.
Specifically, the legislation restricts relief to qualified participants with a valid COVID-19 related reason for early access to retirement funds. These include:
Being diagnosed with COVID-19
Having a spouse or dependent diagnosed with COVID-19
Experiencing a layoff, furlough, reduction in hours, or inability to work due to COVID-19 or lack of childcare because of COVID-19
Have had a job offer rescinded or a job start date delayed due to COVID-19
Experiencing adverse financial consequences due to an individual or the individual’s spouse’s finances being affected due to COVID-19
Closing or reducing hours of a business owned or operated by an individual or their spouse due to COVID-19
Would commissions be included under the "inability to work" if you can't make any sales to earn commission?