Stimulus Payments Withdrawn from IRAs, Tax-favored Accounts.

Economic stimulus payments directly deposited into IRAs and other tax-favored accounts may be withdrawn tax-free and penalty-free, according to the IRS. This 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.

If a taxpayer elected a split refund, however, their stimulus payment will be paid by a paper check. This relief is available for amounts withdrawn from these tax-favored accounts that are less than or equal to...