401k Hardship Withdrawal Under Coronavirus Cares Act

[James McCarthy]

I've been practically day trading in my 401K to reduce the losses from this mess, moving funds back and forth between stable value to stocks a few times a week. So far it has been working very well but one of my trades just violated the round trip rules in my plan and I got a warning. I still have a few available funds I haven't used so I can avoid another round trip for the time being, but not for long probably. My wife is a substitute teacher and she's basically out of a job until September. Can I get a hardship withdrawal of $100K from my 401k and avoid the 10% penalty under the Cares Act, then immediately deposit the money in an IRA and avoid the income taxes? Or will I still be subject to income taxes over 3 years if I don't put the money back into my 401k? We don't need the money. I'm just trying to create more flexibility to take advantage of the wild swings in the market lately. Any thoughts? Thx.