The IRS issued Notice 2020-50, in which they expanded the definition of a Qualified Individual, for Coronavirus-Related Distribution purposes.
A qualified individual is one who is eligible to take a coronavirus-related distribution, and may be any of the following:
Under the CARES Act, an individual is a qualified individual:
- who is diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (referred to as COVID-19) by a test approved by the Centers for Disease Control and Prevention (including a test authorized under the Federal Food, Drug, and Cosmetic Act);
- whose spouse or dependent is diagnosed with COVID-19 by a test approved by the Centers for Disease Control and Prevention (including a test authorized under the Federal Food, Drug, and Cosmetic Act; or
- who experiences adverse financial consequences as a result of:
- the individual being quarantined, being furloughed or laid off, or having work hours reduced due to COVID-19;
- the individual being unable to work due to lack of childcare due to COVID-19; or
- closing or reducing hours of a business owned or operated by the individual due to COVID-19.
IRS Notice 2020-50 added: a qualified individual is an individual who experiences adverse financial consequences as a result of:
- the individual having a reduction in pay (or self-employment income) due to COVID-19 or having a job offer rescinded or start date for a job delayed due to COVID-19;
- the individual’s spouse or a member of the individual’s household (as defined below) being quarantined, being furloughed or laid off, or having work hours reduced due to COVID-19, being unable to work due to lack of childcare due to COVID-19, having a reduction in pay (or self-employment income) due to COVID-19, or having a job offer rescinded or start date for a job delayed due to COVID-19; or
- closing or reducing hours of a business owned or operated by the individual’s spouse or a member of the individual’s household due to COVID-19.
For purposes of applying these additional factors, a member of the individual’s household is someone who shares the individual’s principal residence
Cite: Section 2202(a)(4)(A)(ii) of the CARES Act; IRS Notice 2020-50
