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The policies related to COVID‐19 pandemic such as stay at home orders and social distancing increased daily stress and associated impairments in mental health. This study examines the association between COVID‐related stress and cognitive functioning by examining two different types of daily memory lapses, those related to prospective memory (i.e., memory for future plans) and retrospective memory (i.e., memory for past information) as well as the perceived emotional and functional consequences of daily memory problems. As part of a larger study, 58 adults (18 men; 22 ± 3 years) completed a web‐based version of the daily inventory of stressful events including stress related to COVID‐19 and positive/negative affect for eight consecutive days between 8 September 2020 and 11 November 2020. Findings showed that prospective lapses were positively correlated with COVID‐19 stressors (r = 0.41, p = 0.002). At the within‐person level, daily COVID‐19 stressors were significantly associated with the number of prospective lapses (b = 0.088, SE = 0.040). COVID‐19‐related stressors were not significantly related to retrospective lapses (all ps > 0.05). Our findings suggested that more daily COVID‐19 stressors were related to greater numbers of prospective lapses in daily life even among healthy younger adults. Thus, future research should address long term relations of COVID‐19 stress and cognitive functioning in addition to the specific cognitive impairments related to COVID‐19 infection. [ABSTRACT FROM AUTHOR]