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California Mirrors Federal Covid-19 Relief For 401(k) Loans

Sept. 12, 2020, 11:54 AM

Californians who borrow up to $100,000 from their 401(k) retirement accounts won’t face state tax penalties if they repay the loans within five years under a new state law.

Gov. Gavin Newsom (D) on Friday signed A.B. 276, authored by Assemblywoman Laura Friedman (D), to bring California’s tax treatment of retirement account loans in line with the federal coronavirus relief law.

  • The law took effect immediately to match the CARES Act (Public Law 116-136), which allows individuals to borrow up to $100,000 from their 401(k) retirement accounts and repay within five years...

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