People taking advantage of temporary CARES Act rules that allowed for easier loans and distributions from 401K retirement plans increased slightly through November, a month before the Dec. 30 cutoff.

As many as 1.4 million people have taken a CARES distribution from a major retirement savings firm, about 5.7% of participants on their system, according to data through Nov. 30. The median distribution amount through Nov. 30 was $2,800, a slight uptick from the $2,400 taken through Nov. 12. The average withdrawal also increased to $9,600 from $9,000 in the same timeframe.

Data shows a similar trend — only 5.3% of participants made a CARES Act-related withdrawal and the median amount taken out was $12,800 through Nov. 30. A month earlier, the median withdrawal was $12,000.

So who withdrew money?

In March 2020, the CARES Act made it easier for Americans under age 59½ to access funds in employer-sponsored retirement accounts such as 401K plans, 403(b) plans, and individual retirement accounts. Through Dec. 30, individuals can take out up to $100,000 from eligible retirement plans without incurring the usual 10% early withdrawal penalty and have up to three years to pay the tax liability on the money taken out.

It also made taking loans from retirement plans easier by increasing how much people can take out and extending repayment terms.

While most Americans did not take advantage of CARES Act-related distributions, those who did prefer taking a withdrawal from their 401K plan instead of a loan.

Even though the median amount withdrawn has gone up slightly, it is not cause for concern. Some of the increase is because people who made earlier withdrawals from their retirement accounts took out even more money ahead of the December deadline.

That further supports that most people with retirement accounts have been doing okay financially amid the pandemic, and that the help went to those who needed it most.

In addition, data shows that most CARES Act-related withdrawals have come from the manufacturing and health-care industries — 25% and 17.3%, respectively — both of which have been hit hard by the pandemic and related shutdowns.

Am I a qualified individual for purposes of the CARES Act?

According to the IRS, you are a qualified individual if any of the following applied:

You or your spouse are diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention.

You experience adverse financial consequences as a result of being quarantined, being furloughed or laid off, or having work hours reduced due to SARS-CoV-2 or COVID-19.

You experience adverse financial consequences as a result of being unable to work due to lack of child care due to SARS-CoV-2 or COVID-19.

You experience adverse financial consequences as a result of closing or reducing hours of a business that you own or operate due to SARS-CoV-2 or COVID-19.

Under section 2202 of the CARES Act, the Treasury Department and the IRS may issue guidance that expands the list of factors taken into account to determine whether an individual is a qualified individual as a result of experiencing adverse financial consequences. The Treasury Department and the IRS have received and are reviewing comments from the public requesting that the list of factors be expanded.