The Internal Revenue Service said that economic stimulus payments directly deposited to individual retirement accounts and other tax-favored accounts may be withdrawn tax-free and penalty-free.
The relief is designed to help taxpayers who may have been unaware that by choosing direct deposit for their entire regular tax refund, they were also choosing to have their stimulus payment directly deposited as well. The tax relief is available for amounts withdrawn from tax-favored accounts that are less than or equal to a taxpayer's directly deposited stimulus payment.
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