Qualified Birth or Adoption Distributions

Q. Are distributions from 403(b) plans and governmental 457 plans to cover birth or adoption qualified distributions?

A. Yes, under the SECURE Act enacted in December 2019, qualified birth or adoption distributions may be taken from IRAs, defined contribution, 403(a) and (b) plans, or governmental 457 plans without a 10% penalty tax and without regard to whether it is an in-service distribution if it is taken one year from the birth or adoption of a child. This is limited to $5,000 per parent and per child. An amount equal to the distribution can be repaid without regard to the usual 60 day-time limit for rollovers. This applies to distributions made after Dec. 31, 2019.