CARES Act TDA withdrawals are considered ordinary income. However, the CARES Act includes two provisions that impact the taxability of the income: 1) Members are permitted to spread out the distribution over a three-year period on their tax returns; and 2) members have the option to recontribute (repay) the withdrawal to their TDA account as long as the account is still open.

Tax preparation software can assist you in 2020 tax filing, including treatment of CARES Act distributions. You may also want to refer to the Internal Revenue Service's information, such as the Guidance for Coronavirus-Related Distributions and Loans from Retirement Plans Under the CARES Act (Notice 2020-50) that can be found under Notices on the IRS' Coronavirus and Economic Impact Payments: Guidance page.

For questions about an individual situation, please consult an accountant or attorney. TRS cannot provide tax or legal advice.